In search of a new connection

For Labour, it has been a year of rapid change. Tony Blair talks to Ian Hargreaves and Donald Macintyre `Clause IV is a hopelessly out-of-date expression of what the Labour Party stands for. It has no commitment to justice, to eradicating poverty, to equality, to democracy'

At the end of his first full parliamentary session as leader of the Labour Party, Tony Blair looks worn. A near leafless weeping fig tree, one of two pieces of vegetation unfortunate enough to have found their way into his unimposing office, is h astily removed from camera-shot.

It takes only one question, however, to bring Blair to the edge of his seat in a state of full animation. Just what does he think of those Labour traditionalists who have criticised his decision to send his eldest son to the Oratory, a grant maintained school, rather than the neighbourhood comprehensive?

"We made the decision as parents. This is the school our child would have gone to under the last Labour government and under the next Labour government. This is the one we thought was right for him."

Education, Blair reminds us, is to be the passion of New Labour's programme. But he is not yet ready to declare his party's hand on any detailed thinking on secondary education. The Labour Party, he says, is embarking, as promised, on a consultation withthe grant maintained schools. "But we have said the two key principles are that there must be equitable funding between schools whether they're grant maintained or not. And secondly, whereas the Government believes the public interest should be represented centrally, we believe it should be represented locally."

Schools, says Blair, became grant maintained for two reasons, first because there was a "funding incentive to do so", and second because they wanted greater autonomy. The second aspiration Labour understands, and so the party will discuss with the schools "what is the right structure given those two principles".

He argues that the Government has opted for the "fundamentally wrong" option of a period of consolidation in education. His preferred focus, however, is standards. He does not sound very interested in the controversy over grant maintained schools and he dismisses the idea that Labour should worry itself over the the future of Britain's public schools.

"The real problem is that you do have excellent schools in the state education system. You've also got some very bad ones and ones that are underperforming. And a lot of those are underperforming in precisely the areas where it is most important economically and socially that they do perform well." So, far from the quiet life, what is needed is change to ensure those schools raise their standards. At issue is teacher performance, discipline in schools and "the energy and vitality of the system of inspection to make sure those schools are up to standard".

The Government's own "war" with the teachers was counterproductive. "But it doesn't follow from that that we should simply sit back and say the teaching in our schools is fine, because plainly in a lot of schools it isn't."

He says he is still open-minded about the issue of entry criteria for schools, not even ruling out the use of vouchers, which some on the left believe could be weighted in such a way as to attack educational underprivilege. In his view, however, no one has yet come up with a feasible scheme in which vouchers can be used "without avoiding one set of educational problems and simply buying into another". But he is clear that it would be a "big mistake" to go back to the 11-plus. "In my view, the future of the education system will not be determined by questions of structure, or even by publishing the information that the Government has published and which we do say should be made available to parents. It will be determined by the degree of action dedicat ed to the question of standards."

In discussing Europe, Blair shows a less sure touch, although on the headline issue of the moment - whether to commit his party to a referendum on the outcome of the 1996 intergovernmental conference, he is playing a visibly tactical game. But he scorns as "pathetic" the idea that Labour should involve itself in a contest with the Government over who suggested the proposal first, and lambasts John Major for backing a referendum just to unite his party.

"What I've felt for a long time is that those of us who are pro-European and do believe Britain's future lies in the centre of Europe have to argue our case now. The inevitabilist case for European integration is in tatters . Let's be clear about that. The next stages will come through persuasion. I happen to believe there is a future for that stronger European co-operation, but it can only be done through popular consent. That's the guiding principle. Whether a referendum is necessary to do that needn't be determined at the moment. That's why I don't feel any onus to go further. As I said in the House of Commons a couple of weeks ago, it can't be determined by political elites. That just won't work any more."

On his own agenda for the 1996 conference, Blair is relatively cautious, stressing the importance of non-institutional issues such as jobs, competitiveness, and CAP reform, which are hardly at the centre of the political debate. But he acknowledges that eastward enlargement poses difficult and fundamental problems for the internal structure of the EU. He refuses to be drawn precisely on whether, unlike the Government, he can envisage further powers for the European Parliament, commenting simply on the need "to bridge the democratic deficit".

And that, at least partly, means better scrutiny of European legislation by national parliaments. "But I certainly think there's a case for ensuring that the European Parliament is taking a greater democratic role whilst recognising the inevitable limitations that it has." On the foreign affairs side of the pre-IGC debate, which turns on the question of the future of Nato and Europe's own defence structures, he has little to say, although he knows that he is not in favour of a combined European armed force, or of the Brussels Commission having any new involvement in defence or foreign and security policy - all of which could have come from a Douglas Hurd briefing paper.

Blair sticks firmly to his line that Labour supports a single currency in principle, but only if there is "genuine economic convergence" between the joining countries. It is unclear how this differs from the convergence criteria in the Maastricht treaty which, remarkably, Britain is on course to meet in 1996-97. But, he insists, there is a difference. In other words, he wants as hazily worded a get-out clause as he can find.

There are two categories of objection to monetary union, he says, the first being a political argument purely about national sovereignty, and one that Labour does not share. But the other is an economic obstacle, "that you cannot lock together economies whose underlying position is different". That has to be overcome before Britain can expect to benefit from monetary union. ERM showed that the damage of trying to force your economy to fit outweighs the potential benefit. "With that convergence, there are benefits in joining the single currency", and he believes, in contrast to Mr Major, that it is "very much" on the European agenda - but much more "realistically" than before. "People feel less bound-in by artificial time-scales and more determined to proceed only if it is genuinely economically sustainable."

So is he now ready for an independent Bank of England, paving the way for the independent European central bank that monetary union would require? Well, an independent Bank is not Labour policy, he says, although he thinks the decision to publish the minutes of the meetings between the Governor and the Chancellor have "significantly altered the context of interest-rate policy in a way that perhaps was not entirely appreciated at the time it was done. I think that greater openness is welcome, though it clearly places a very much greater degree of political responsibility on whoever is Chancellor of the day. If you're going to go against the judgement of the Governor of the Bank of England you're going to have to have very good reasons you can clarify and communicate for doing so."

If Blair's distinctiveness from the Prime Minister on Europe is a matter of nuance and tactic, their differences on constitutional issues are absolute. Labour has an ambitious programme of devolution and a firm commitment to removing the hereditary principle in the House of Lords. Constitutional reform, he maintains, is a vital instrument in "reconnecting the people with politics". The Tories "are making a strategic error of enormous proportions if they think the British people look at their constitution and the way they're governed and think nothing needs changing."

On the monarchy, he does not so much defend the case made recently by Jack Straw, his home affairs spokesman, for a scaled-down royalty, as his right to argue it. The Conservatives' "hysterical pursuit" of Mr Straw's comments was a "ridiculous" misjudge ment of the public mood. Blair himself certainly does not believe in the removal of the monarchy and he has not "devoted a great deal of time" to thinking about the issues raised by Mr Straw.

But on devolution, which the Tories are cranking up in earnest to make a central issue of their general election campaign, Blair is unrepentant. "The Government is making a huge strategic error in believing that to attack the notion of devolution is somehow a defence of the Union. I would turn that on its head and say that a sensible defence of the Union requires proper political devolution and not that kind of bureaucratic devolution that you've got through the Scottish Office, where you've got health and education and law and order policy that are different in Scotland but are determined essentially bureaucratically by the Scottish office."

But what of the party's own constitution and the struggle over Clause IV? The leader dismisses the notion that this is an internal distraction from the task of fighting the Government. "Clause IV is a hopelessly out-of-date expression of what the Labour Party stands for. It has got no commitment to social justice, no commitment to eradicating poverty, no commitment to equality of opportunity or treatment of people, no commitment to racial equality, no commitment to democracy, no commitment to solidaritybetween people. It confuses the basic values of the party with the means of achieving them. I think there is a great danger always that people slip back and become complacent and stop understanding why the Labour Party is doing well.

"Let's be brutal and blunt about why the Labour Party is doing well. It is doing well not just because the Conservatives are unpopular, but because Labour appears to be back speaking for the majority mainstream view of the British people. It is connecting with them at the moment because it's saying we want to move this country forward. We're not interested in switching the clock back and having debates about the Sixties and Seventies and Eighties. Clause IV will be the visible, tangible symbol of that bond of trust."

It is, he adds, "bizarre that Labour went into the last election and will go into the next one without any substantial commitment to extending public ownership, certainly into normal parts of private industry, yet in its constitution it promises to nationalise the means of production distribution and exchange. It's not sensible."

Does this imply that Labour would not take British Rail back into public ownership?

First of all, Blair wants to clarify his attitude to privatisation. He believes it was wrong to sell the water industry but "I don't think it's possible to buy it back. Because what the Government does with its privatisations is that it takes the money and spends it. That's the extraordinary thing. They've had North Sea oil. They've had privatisation proceeds of billions and billions of pounds worth about £8,000 for every family in this country, but the money's gone."

But in the case of BR he thinks there is still a good chance of stopping the sale, given the state of public opinion on the subject. But how does all this square with Blair's frequent declarations of Labour's commitment to a dynamic market economy? Can he think of any instance when Labour has actually chosen to place an institution or function of government in the private rather than the public sector?

There is a pause, but he thinks he can. Was it not a Labour Chancellor, Denis Healey, who sold off the first tranche of British Petroleum? More topically, he points to Labour's conversion to the principle of introducing private sector finance into publicprojects.

"When we've talked about nursery provision, we've talked about providing a mix of public and private provision. I don't regard these as ideological questions any more. They are practical questions: how do you best achieve the public interest objectives you want? That's why the whole economic political argument's got to evolve."

Blair doggedly refuses to commit himself on the key conundrum for Labour's election campaign: how it will respond to the tax cuts he confidently expects the Government to offer in advance of it. "We shall decide what tax proposals at the time we want to decide them. The most astonishing statistic of the Tory years is that after 15 years of a government dedicated to cutting tax and spending, we have tax and spending as a higher proportion of national income than when they came to power. It is because we are taxing and spending to pay for failure, to pay for unemployment, crime, social decay. We will determine our position when it's the right time to do so, and what the right balance is between tax cuts and public spending and measures of investment. Butin my view it would be very foolish for us to bind ourselves into that position now."

Nevertheless Blair is surprisingly sure of what he judges will be the themes of the next election. "I've got a very clear idea of what I want in the manifesto now. I'm not about to announce it, but I do have a very clear idea.

"The Tories believe their problem is disunity. But disunity is a symptom. The real problem for the Tories is that they've never decided whether they want a Thatcherite or a post-Thatcherite agenda. And the truth is that we are developing and have developed the post-Thatcherite agenda. It is about that new relationship between society and the individual. It's about action, economic and social and political, and this concept of renewal will give purpose back to the country.

"The next day's papers come and go. The key thing is to focus the whole time on that strategy and how you deepen that trust with the people." The priorities for Labour's first term, he says, would be an active policy towards industry, education, unemployment and the health service, where the challenge is "to get the money to the front line of the services rather than having it caught up in bureaucratic web".

It is, he says, a focused agenda from a man whose unshakeable focus is to win that election. What binds it all together, he says, is the Blair project: "to rebuild Britain as a strong civic society, delivering economic prosperity and social justice, based on the belief that those two things go hand in hand. That's the post-Thatcherite agenda. It's not about the old-style collectivism. And it's not about the new right's laissez-faire."

If it all sounds too exhausting, Blair is not admitting it. He acknowledges that "within 20 minutes" of John Smith's death in May his entire life had changed, and that he and his family have had to endure a predicted onslaught of media intrusion, from decisions about schooling to what he pays to have his hair cut.

The family, he reports, is bearing the strain well. "The children are young and robust enough not to be overwhelmed. I can meet ministers and monarchs and they're not much impressed, but when we met Alex Ferguson, the manager of Manchester United, they realised there was some point."