HL Deb 31 October 2000 vol 618 cc860-75

7.30 p.m.

Lord Patten rose to ask Her Majesty's Government whether they will assess their progress to date in the development of policies which are specifically designed to embody the Third Way.

The noble Lord said: My Lords, I am glad that we can have a debate like this in the measured atmosphere of your Lordships' House, uniquely in the known constitutional world a self-regulating Chamber. This is one quality of the Third Way approach that I trust the Government do not wish to destroy in the future. That Government are represented tonight by the noble and learned Lord, Falconer of Thoroton, for whom I have a considerable respect. I do not seek to damage him in any way either in this House or in government. Therefore, I would not wish upon him in particular the title "Minister for the Third Way"; it is a cruel and unnatural punishment for anyone to have to bear.

Having tried to understand what the Third Way is for the past three years, it is my thesis tonight that it is a task impossible, trying to breath life into what three years ago seemed to me to be a sparkling motif of new Labour but today seems to have no political meaning whatever. With one notable recent exception, it is no longer mentioned in ministerial speeches. It is no longer spun, even by spin doctors, which is a sentence of death for any political philosophy in new Labour.

I believe that three years ago it was represented as a big idea. It is, in any event, always wise to count the political teaspoons when any politician claims new big idea, particularly the Third Way. After all, not many big ideas are given to any one century. There were probably only two big ideas worth that title in the whole of the 20th century. One of them was undoubtedly communism, with its little brother, its younger relative, socialism. The second was their eventual counterpart of socially responsible markets, in movements which began with considerable success in the United States and the UK in the 1980s.

There I was back in 1997, a new Member of your Lordships' House, absolutely bedazzled by the Third Way hype which existed then and in 1998. The trouble was that I could not see where either the political or philosophical beef was to be found. I thought myself dim for missing the point, so I set out to try to educate myself by asking some Questions of Her Majesty's Government in an attempt to be helpful to others of my colleagues who might also have found the notion somewhat challenging.

So, for example, on 8th June 1998, the then Lord Privy Seal, the noble Lord, Lord Richard, told me in answer to a parliamentary Question, the third way returns to the values of the left—justice, solidarity, freedom—but we are committed to rethink how we deliver them".—[Official Report, 8/6/98; col. WA 59] I thought that I would allow a passage of time to elapse for that rethink—because rethinks take a bit of a while. Two years seemed a reasonable time, so I returned to ask another Question on the nature of the Third Way. It was answered by the noble and learned Lord, Lord Falconer of Thoroton, in his characteristically courteous way on 19th June 2000. He stated: The Government in their manifesto promised that 'in each area of policy a new and distinctive approach has been mapped out, one that differs from the old left and the Conservative right— concluding triumphantly— That is what we have done".—[Official Report, 19/6/00; col. WA 10.]

I was not wholly clear and thought myself perhaps dimmer than I had previously believed. So being only a little clearer as to what the Third Way meant after that enviable display of masterly insouciance in answering Questions, I thought that I would try one more time by being absolutely specific. I asked the Government whether they would set out three examples of the new and distinctive approach represented by the Third Way.

A certain amount of time elapsed, but at the end of last week, and just in time for this debate, a further Answer came from the noble and learned Lord, Lord Falconer of Thoroton. He suggested that all I had to do was to look in the Government's Annual Report for 1999–00 and there would be found examples of the Third Way. I have to tell your Lordships that I did exactly as the noble and learned Lord suggested. I read the Government's Annual Report for 1999–00. It might be interesting to ask how many Members on the Benches opposite have done so. Having done as the noble and learned Lord suggested, I found no examples. The Third Way is not even mentioned in the Government's report for 1999–00.

So after all those questions, I am back where I was more than two years ago, absolutely none the wiser as to what the Third Way is all about and I regard myself as an innocent victim of circular argument on the part of Her Majesty's Government. I also cast my mind back to when the Jesuits wished condign and savage punishments on me for obstinate refusal to answer questions. I was reminded of that experience all those years ago.

Thus I was driven to what seemed to me to be the only sane conclusion: that there is nothing in the Third Way; that there is nothing to new Labour's once-vaunted big idea; that it is now an embarrassment to them. Being fair minded to a fault, however, I thought that I might ask our splendid Library for a factual chronology of statements by Government on the Third Way. It responded on 24th October, stating that: Broadly speaking, there has been a decline in the Government's reference to the Third Way … In 1998, Government speeches and press releases discussed the Third Way … over the last two years the Third Way has appeared infrequently in discussions of Government policy, except in relation to Europe".

That is indeed the case. The Prime Minister is a great proponent of the Third Way, but he always goes abroad to talk about it. Your Lordships may remember that a few years ago he went to Singapore to launch the concept of the stakeholder pension. South-East Asia seemed a suitable place to do so. This year, unusually the Prime Minister returned once more to the topic of the Third Way, but he took the precaution of going to Warsaw to make the speech which he felt was important. So I am driven to assume that the Government have themselves reached the conclusion that their idea has no substance and that there is no philosophical core to their new political creed launched in 1997.

There were some exchanges over the issue between the present Lord Privy Seal and myself during Questions in this Chamber on 25th July. So robust was the exchange that it even got the right reverent Prelate the Bishop of Hereford to his feet. He intervened to ask the Lord Privy Seal: Could we press her not for another list of facts and figures but for a succinct expression of the Government's political philosophy".—[0fficial Report, 25/7/00; col. 275.] Needless to say, the House was disappointed.

That is not to say that there is not much of importance being written by philosophers, political scientists and other serious thinkers on the Third Way. I strongly recommend to the House an article recently written by the noble Lord, Lord Dahrendorf, who I am delighted has found the time to speak in this short debate. He wrote a marvellous exposition of the Third Way entitled The Third Way and Liberty: an Authoritarian Streak in Europe's New Centre. It is to be found in a 1999 publication of the journal, Foreign Affairs, in which he observes: The term 'Third Way' shows a curious absence of historical awareness among its protagonists—a shortcoming that characterises the Clinton-Blair type of leadership". He added in a further sentence: it is not only cynics who have observed that the best definition of the Third Way is whatever Blair actually does".

In recent years, acolytes of this movement have been falling over themselves to get off the boat and to condemn the vacuity of the Third Way that they once praised. Let us take one example. One of the leading altar boys of new Labour, Mr Will Hutton, having reassessed his views of the Third Way, said accurately on 23rd November 1999 that, The Third Way has bombed before it has even been properly launched". Just so, my Lords.

It seems to me that the concept of the Third Way is an inchoate embarrassment to Her Majesty's Government which should be given a decent burial— unless the noble and learned Lord, Lord Falconer of Thoroton, has come here tonight to explain, perhaps after a three-year delay, exactly what it means and whether the Government, having set it out, still support it.

7.40 p.m.

Lord Lipsey

My Lords, those who have read the noble Lord's book Things to Come: the Tories in the 21st Century will know that he is no mean political philosopher. We are delighted that this evening he attempts to extend the range of his brain to the Left. Nevertheless, having listened to the noble Lord, he struggles with the concept of the Third Way. As someone who has practised on the Left for rather longer, perhaps I may try to help. The Third Way is nothing more or less than good old social democracy modernised and revised to fit today's conditions. As such, naturally it informs all the Government's policies. Having read the Government's annual report, the excellent progress that they have made is set out very clearly therein.

7.41 p.m.

Lord Howell of Guildford

My Lords, all noble Lords should be grateful to my noble friend Lord Patten for telling us about his search for the Holy Grail of the Third Way over the years. We should share with him some commiseration over his failure to secure two clearer sets of answers. I regard rather seriously a great deal of the analysis which has gone into discussion on the Third Way. I read with interest the writings of the patriarch of the Third Way, Professor Anthony Giddens, and some of his acolytes. Professor Giddens is right in his analysis that information technology has a profound effect on the structure of our society. It redistributes power away from central governments and makes it much more difficult for central authorities to administer complex systems. It also makes it much easier for individuals and groups to mobilise and to spring up very fast—almost faster than central administrations can comprehend—and apply additional political pressure to established hierarchies of society. That has profound implications for the future pattern of governance.

Many people who are involved in the business of governance will have to learn a new language and techniques to prevent e-enabled protests—and often e-enabled violence—having an enormous effect on the entire pattern of globalisation and national and international policy. There is no doubt that there is a new political landscape. To that extent, those who struggled towards something called the Third Way were right to realise that an enormous issue had to be tackled.

I have difficulty with the label "Third Way". That label belongs to 20th century ideologies which one hoped had been left behind: the Left, the Right and the new way in between. Over and above the fact that it is a very old idea, whose origin is not entirely creditable—many third ways have been tried in the past, some very unpleasant—the real difficulty is that in the past few years the whole debate has been internal to the centre-Left of politics. Those on the Conservative side who are not in the centre-Left look with amazement at the way in which some of the gurus of the Third Way have "discovered" things which have been obvious to them for many years, and were debated 20 or 30 years ago. Suddenly, it has been rediscovered and repackaged as a novel insight and called the Third Way.

In the 1950s and 1960s Tony Crosland told the Left that it need not go for nationalisation and it could get off the hook by going for the mixed economy. A great many people on the Left thought that that was the way forward. To their horror, they discovered that the mixed economy did not work and a new brand of capitalism and market economics clearly delivered a new pattern of society worldwide, not just in this country. There was a necessity to invent a new envelope to take account of the fact that market economics had to be admitted into the socialist and centre-Left pantheon. It was a very late arrival on the scene. Many of the matters that we on the centre-Right debated 20 years ago have now been rediscovered by the centre-Left, which appears to have slept through the period when we first thought about privatisation and the power of markets.

One must be generous. It is better that one be saved. The centre-Left has arrived at the reality that we live in a world dominated by markets and that the problem which faces politicians is to match the aspirations and benefits of the global market economy with the fears and worries of individuals and groups. Those outside the centre-Left marvel at the slow process of discovery and how unoriginal a great deal of the Third Way thinking is. It does not carry the debate very much further.

Another problem with the Third Way school of thought is that it completely underestimates the new nature of global markets. One cannot separate the market system from the social and moral order. A good many people say that that can be done and that markets must be approached with a handkerchief over one's nose and reluctantly adopted. That is the view of parts of the Left and the Third Way school of thought. That is a completely false division. As a result of the internet system in which we live, markets, even more today than was the case in the past, are a generator of social capital and are part of the moral order. We now live in what Bill Gates calls the ultimate global marketplace. There is no choice or any third way between that and the protected sepia-tinted world of Hovis, happy homes and the beer-drinking past. All that has gone.

Politicians and those involved in public affairs must grapple with the political pressures generated by the global marketplace. Unless they do so, the results will be similar to some of the events in Seattle, Prague, Houston and the City of London where people marched and smashed up computers. Organisations which protest are good and bad, and some we do not see at all. I refer to international criminal fraternities which are organised through internet power and information technology on a vast scale and challenge the power of any national government.

What do we do about this? We become wiser. Politicians and those who want to see stable governance in society should show a little more humility and lower expectations about what governments can achieve. They should cease to place fancy labels on grand strategies which people know cannot be delivered, and concentrate on the new priorities which people seek across the world to give them a law-abiding, stable and safe society in which they can go about their business and create the wealth which governments cannot create.

7.48 p.m.

Lord Dahrendorf

My Lords, we owe the noble Lord, Lord Patten, a debt of gratitude for providing us with an opportunity for a little light relief after debates and Divisions in this House on weightier subjects throughout the day. I refer in part to the relatively light weight of the notion of a Third Way. As the noble Lord, Lord Howell, indicated, in certain circumstances historically it had more weight, but perhaps history is not the strongest subject of those who in recent years have advocated the Third Way. One also refers to the notion that governments Actually apply a philosophy rather than follow the great Harold Macmillan's admonition "Events, my dear boy, events", to which one must respond in a way that stands up to the scrutiny of history.

As the noble Lord, Lord Patten said, the Third Way is no longer the current fashion. The recent notion is equally light. It is Charles Leadbeater's Living on thin air: a new economy which contains the language of modernisation, the forces of conservatism, and so on.

The Third Way was never actually a programme. It was intended to be what in post-modern language—not mine really—would be called a narrative. That perhaps is the one serious point I want to make. It is a narrative in the sense that it was intended to provide a big story which pulled together the necessarily varied and diverse strands of the policy of a government. Such big stories are rare. I am not talking about the very big stories of communism and fascism, I am talking about the next level—the national big stories.

There were two big stories after the war, whatever one feels about them. There was the Attlee story of extended citizenship rights for all and everything that goes with the extension of citizenship rights, not least as a response to the experience of the nation during the war.

There was the big story which one might call the Thatcher story of rolling back the state, and perhaps curtailing private power within the country in the interest of a more open economy and society.

If one does not have a narrative of this major kind, one is left with a list of achievements. That is fine. But it marks the different between great governments and good governments. New Labour at a certain point hoped to have such a narrative. Perhaps it was thought that my distinguished, imaginative and entrepreneurial successor as director of the London School of Economics, Anthony Giddens, had provided the language for it. He stated: The third way suggests that it is possible to combine social solidarity with a dynamic economy, and this is a goal contemporary social democrats should strive for". The noble Lord, Lord Lipsey, in a laconic way confirmed that interpretation. That sounds fine, but, in order to become a narrative which pulls things together, it not only requires major deeds to which one can point, but also some intellectual points. There are three. First, a dynamic economy is not just an economy left alone. There are many choices which can and have to be made even in economic policy. The stakeholder idea was not so bad. I was interested in the phrase used by the noble Lord, Lord Howell—"a socially responsible market economy". Those are varieties of economic policy. One of the weaknesses of the Third Way language was always that they simply did not appear.

Secondly, social solidarity is not just a matter of what nowadays is sometimes called life politics. I am very appreciative of the many things which the Government have done for the third sector, the voluntary sector, in which I am involved. Theirs is a remarkable record. But there are big issues concerning the creation of a public sphere in which people feel at home. It is a public sphere and thus a redefinition of the boundary between public and private. In other words, there are substantive policy issues which if pursued could provide a sense of solidarity.

Thirdly, there is the missing word "liberty". I have read most of the literature on the Third Way in all the major European languages. It is quite extraordinary that the word "liberty" does not appear, as if it was no longer a problem. I believe that has a relationship with the latent and sometimes manifest authoritarianism of the advocates of this new policy.

I am a reformer. I feel that there are great problems to be tackled. But I am a reformer whose main concern will forever be liberty under changing conditions. The political economy of liberty is a possible story—social liberalism. I am not excessively fond of that term. It is a liberalism which is aware of social issues. I am not sure that is the narrative which the Government are likely to be able to use.

Thus all that remains is likely to be a long list of actions by the Government; the kind of thing which the annual report contains. That leads me to the conclusion that this is a good government, but it is not a government with a big story. Everything that has been said about the big story may as well be forgotten. Many may say that that is enough. It may well be. But it is less than the claims we heard a few years ago.

7.56 p.m.

Viscount Goschen

My Lords, the House is indebted to my noble friend Lord Patten for giving us the opportunity to debate this important subject. The House will be deeply sympathetic to my noble friend. He has searched high and low—rather like the Cardinal's men after the Pimpernel, bursting open doors only to find the prize whisked away at the last minute—through his judicious use of the written and oral Question.

The House is also indebted to the noble Lord, Lord Dahrendorf, who in the seven minutes available flexed his considerable intellectual muscles on this subject. When I heard the succinct description by the noble Lord, Lord Lipsey, of the Third Way, I felt that the coded message was, "This is a private fight between the old left and the new left. Keep off, it is not your subject". My noble friend Lord Patten's brain should not be exercised too far in the direction of the left. We know that my noble friend's brain is fully capable of encompassing all directions.

This is an important subject. We are told that the Third Way is the bedrock of the Government's approach to administration. Therefore, particularly as we approach a general election in the not too distant future, a full and proper explanation from the Government of what this core principle is will be necessary for the electorate to evaluate fully the Government's performance against, albeit retrospective, benchmarks. The text of my noble friend's Question invites the Government to assess their progress to date in the development of policies which are specifically designed to embody the Third Way. I am confident that the Minister will do that in his concluding remarks. He will show us the policies and the goals which represent the Third Way and give a self-assessment, as it is known in business circles, of how the Government have progressed towards those goals.

I agree with previous speakers that at the moment we have precious little to go on as to what exactly the Third Way is. Professor Giddens—the originator of the theory—has written great tomes on this and associated subjects. But in the interviews which I have seen, he has found it very difficult to sum-up concisely what the Third Way is. My noble friend, in all his years of diligence in seeking answers, has not got very far. What we are told could briefly be summarised as "Not what the old left did, but not what the Tories did either". Most telling is that this concept has not yet come to its conclusion—its definition. It seems to be under the category of "work-in-progress". Although the noble and learned Lord faces a very difficult task, that gives him some flexibility in setting his goalposts.

Therefore, we are left with something of a woolly-minded embodiment of a desire to seek new ways to address new problems. I agree with my noble friend Lord Patten that there is relatively little that is absolutely new in the world. There are certainly new technological developments. The Government have to consider carefully how they react to and address the technological change to which my noble friend Lord Howell referred in his remarks.

If we are to take the Government's production of the Regulation of Investigatory Powers Bill as an example of how they deal with a new and fast-emerging technological sector, we are in some difficulty. I should like the noble and learned Lord the Minister to explain to the House how he felt that the Government's policy towards such a Bill, which represented the biggest technological issue with which this House has dealt for a very long time, could be considered to have been tackled in a way so very different from the way these matters have been dealt with in the past.

In short, there is a substantial gulf between the clarity of the principles which have driven the revolutions that we have seen in the past 20 years, with the rollingback of the state, the empowerment of the individual and the development of free market economies in the UK, the US and further afield, and the "things can only get better, but we're not sure how or why" approach of the current Administration.

Let us consider policies. Perhaps I may ask the Minister about the privatisation of air traffic control, a subject which will be slightly tender to the Government in the light of the consideration of the Transport Bill. That policy was wholly opposed by the party opposite when in opposition. As soon as it came to government, it suddenly decided that a 180 degree U-turn was appropriate and that it was now in favour of the policy. How is the Third Way to be measured against that policy? In what way is it fundamentally different from the consideration of these issues in the past?

The Prime Minister has been quoted as saying: I believe that politics is first and foremost about ideas. Without a powerful commitment to goals and values, governments are rudderless and ineffective". Quite so, my Lords. That would get a substantial "Hear, hear" from most independent commentators. But if the goals in which the Prime Minister and his Government believe, andthe means which they see are best suited to achieve them, are encapsulated in this Third Way, which in turn is a concept so vague as to defy definition, what other conclusion can the House come to than that the Government are driven by expediency and the whim of the focus group?

Perhaps the central conceit with which we have to deal in consideration of the Third Way is the concept of newness. It reminds one very much of a soap powder being relaunched—"New soap powder! Completely different from all things that went previously. All the soap powders that we have previously launched have been defective products, but look at how we clean your policies whiter than white now". We have to deal with this concept of newness, this disregard of history, this removal and attacking of institutions which have served the country well in the past—from your Lordships' House to the great universities and many other historical institutions. All those institutions have come under attack from the Government in the name of the Third Way.

The noble and learned Lord the Minister has a substantial task in replying to the debate. We look forward to his remarks. Perhaps the Third Way can be said to encompass the big tent of politics. On that, I shall await the Minister's verdict.

8.4 p.m.

The Earl of Northesk

My Lords, I join other noble Lords in congratulating my noble friend Lord Patten on securing this debate. Like my noble friend, we can speculate why it is that, for all the claims of its adherents that, the third way debate has become a truly world-wide one, affecting all countries", its profile has been so lacklustre. All of us therefore anticipate the contribution of the noble and learned Lord the Minister so that the "irreducible core" of these "ideas", the "goals and values" of the Third Way, can finally see the light of day. After all, as my noble friend Lord Goschen pointed out, it is, the abiding philosophy and vision of New Labour". As noble Lords have said, it is difficult to know where to begin. But what better source of a definition of the Third Way than the Prime Minister's own words: It is not a dogma of the Old Left, concentrating on means rather then ends. Nor is it the laissez faire of the New Right. Unlike the Old Left, we want a market economy. But unlike the New Right, we do not want a market society". So now we know! Obvious, isn't it? Or is it'? All this definition really tells us is what it is not, rather than what it is. So the question remains: what is the Third Way?

Well, the list of those who have tried to define it is copious. For the light relief of the noble Lord, Lord Dahrendorf, we can rely on the American humorist, P. J. O'Rourke, who has described its broad philosophy as, a sort of clarion call to whatever". Hillary Clinton is another Third Way-er. She has reportedly portrayed it as, a unified field theory of life", that will, marry conservatism and liberalism, capitalism and statism, and tie together virtually everything: the way we are, the way we were, the faults of man and the word of God, the end of communism and the beginning of the new millennium". Gosh, my Lords! Is it a bird? Is it a plane? No, it is the Third Way, an attempt to give the centre left the status and values of "motherhood and apple pie". But this serves to demonstrate the point made by the noble Lord, Lord Dahrendorf. Its construction is so ephemeral, so anodyne, that it can be taken to mean—or be—almost whatever anyone wants.

Even some of the arch-gurus of the new Labour project have got in on the act. My noble friend Lord Patten cited Will Hutton. I cannot resist completing the quotation: The difficulty is that it is inextricably associated with New Labour and thus too readily written off as another vacuous PR stunt. Tony Blair has released a barely read Fabian pamphlet, while Tony Giddens, the director of the LSE, has produced a small book. Both works have been dismissed as purposeless guff; substance-free, New Labour meanderings lacking rigour and whose only purpose is to justify the party's temporising". But, to be fair, my Lords, we should measure the Third Way against a practical example. Let us consider the Prime Minister's speech last week on the environment. Simon Jenkins, writing in The Times, commented: Mr Blair is an honest man and clearly did not enjoy this speech. He likes his politics naive and this was complicated. He was soon bemoaning his quandary, that of 'a politician's need to woo the electorate as well as to lead them'. The middle way was a crevasse". I do not dispute the analysis of my noble friend Lord Howell but, by attempting to steer a middle course between two competing philosophies, the Third Way risks satisfying neither. In essence, there are two options. Either policy is reduced to favouring one over the other—as with, for example, the legislative output of the Home Office during the current Session, where Jack Straw has seemed vicariously to speak left while acting right and vice versa—or it is forced to sit uncomfortably on a fence between the two. Witness here, for example, the persistent and enduring fudge on transport policy—or even reform of your Lordships' House. The problem is that so much of the Third Way is, by definition, riddled with internal conflict.

To make matters worse, as the Prime Minister himself has admitted, the whole of the Third Way is "work in progress". Far from being a robust and coherent set of beliefs, or what the noble Lord, Lord Dahrendorf, would call a narrative, it has no locus because it is still being formulated. But we can discern something else from the Prime Minister's environmental speech. As Simon Jenkins puts it: His greenery had run slap against his self-confessed 'need to woo the electorate". In other words, the Third Way is little more in some respects than a means of pleasing the voter. As Peter Riddell has observed: Blairism appears as an ideological vacuum, an electoral rather than a governing strategy. Policy is merely a response to polling and presentation, to the need to find 'eye-catching initiatives"'. Always the code hidden within the Third Way lexicon is about not damaging electoral support. Could this explain why the Chancellor felt the need to pursue his policy of taxation by stealth? What is important, above all else, is not to "scare the electoral horses". We should remember that the project was conceived long before anyone sought or attempted to legitimise it by giving it its Third Way substance. What matters to new Labour, as hinted at by my noble friend Lord Goschen, is the "big tent". Its most potent symbol is the second full term, and it is this, more than anything, that sets Islingtonia's pulses racing. The truth is that the Third Way was stitched to accommodate new Labour's electoral strategy rather than flowing seamlessly from core beliefs. Little wonder that it is so threadbare.

So what is its place now in the Government's scheme of things? As my noble friend Lord Patten pointed out, the auguries are not good. My noble friend referred to the Prime Minister's speech to the Polish Stock Exchange. Curiously enough, despite having been trailed as a statement of Third Way values, the Prime Minister did not even use the phrase, "the Third Way".

Indeed, I noted only last week that the call has gone out to the No. 10 policy unit and the coterie of new Labour think tanks to come up with the elusive "big idea" for the party's next manifesto. Could it be that the Third Way has already lost what little lustre it ever had?

The noble and learned Lord may wish to evoke "the dark forces of conservatism" in response. After all, it is part of the language and the context of the Third Way. But I hope that he—and the Government—will reflect on these wise words from Professor Anthony Giddens: New Labour is widely seen as depending on media-oriented politics, and as creating 'designer socialism'. 'Personal images, symbolic stagings, sound bites, visual gags' all count for more than 'issues, arguments, projects and the evaluation of campaign promises.' A precept of successful advertising, however, is that image alone isn't enough. There must be something solid behind the hype, otherwise the public see through the facade pretty quickly. If all New Labour had to offer were media savvy, its time on the political stage would be short, and its contribution to the revival of social democracy limited". How true, my Lords.

8.12 p.m.

The Minister of State, Cabinet Office (Lord Falconer of Thoroton)

My Lords, perhaps I may join noble Lords in expressing my gratitude to the noble Lord, Lord Patten, for giving us an opportunity to debate the Third Way. We have had an interesting debate. I should like to single out two or three contributions.

First, the noble Lord, Lord Howell of Guildford, with respect, wrestled with the problem that gave rise to the Third Way. Secondly, the noble Lord, Lord Dahrendorf, approached the issue by identifying what were the problems as regards philosophies that had held sway in previous decades. Thirdly, my noble friend Lord Lipsey spoke clearly and succinctly. He provided a complete answer to the question put by the noble Lord, Lord Patten, in the Unstarred Question which has given rise to this debate.

As my starting point I shall take a comment made by the noble Lord, Lord Howell of Guildford. Society has changed. I do not believe that anyone would dispute that. The noble Lord referred to globalisation. That has brought with it greater opportunities for the world, but also greater risks and insecurities. Information technology and the growth of what has come to be known as the "knowledge economy" mean that people require greater training, better education and more equipment to face the different world in which we live.

The noble Lord, Lord Howell of Guildford, also referred to the fact that people now have different expectations of their political institutions. They expect greater connection with their political institutions. They expect them to be more responsive and understanding, as well as more connected to the individual needs of each member of the electorate. These changes require politicians to change. The noble Lord explicitly acknowledged that.

The noble Lord, Lord Dahrendorf—implicitly rather than explicitly—accepted that people are fed up with a polarised debate between the ideological proponents of state control and producer interests on the one hand and, on the other hand, those who are perceived to be too slavish to the market, who deny the value of community-driven solutions and who regard all interventions by the state as evils to be undone, irrespective of the risks that such privatisations may involve.

A new approach is required; plainly not the old left and plainly not the new right. The noble Lords, Lord Howell of Guildford and Lord Dahrendorf, both acknowledged that. However, I must part company with the noble Lord, Lord Howell of Guildford, because, having stated that a new approach was required, he then declared that the Third Way was nothing new and that the right had been wrestling with such issues for years. Unfortunately, he then failed to reveal to noble Lords the solutions devised by the right.

We all agree that a new approach is required. I believe that that approach is characterised, first, by the need for a strong and stable economy. We can all agree on that. Secondly, we need to promote social justice. Thirdly, we must recognise that neither the state nor the market has a premium on the correct solution. Fourthly, the successful market economy and social cohesion need to be combined. Lastly, just as the benefits of "community" are recognised, the need for individual responsibility is also accepted. How can I summarise this approach to shorten it sufficiently to meet the question that lies at the heart of what noble Lords have pointed out in their contributions tonight?

At its heart, the approach requires that a strong economy and social justice make up two sides of the same coin. It requires that the poor, the marginalised and the excluded should all be enabled to enter into civil society as actors rather than as mere passive recipients or as victims. Welfare should be preventive rather than simply ameliorative. People must be given equality of opportunity. Education, training and the opportunity to take up work will bring about that equality of opportunity. What is new about the Third Way and about the approach being taken by the Government is that it combines an acceptance of, on the one hand, the need for a strong economy and, on the other hand, the need for social justice. Those two ideals are not perceived to be in conflict.

Why is this issue being debated right across the world, not only in Britain and America, but also throughout Europe? It is because the need to combine strong, market-driven economies with the delivery of social justice is acknowledged by this Government. The Third Way seeks to wrestle with that problem. Indeed, all political governments are wrestling with the same problem.

The noble Lord, Lord Dahrendorf, commented that there was no "big idea" behind this. However, there is a big idea which underlines this; namely, that the old conflict—in which the noble Earl, Lord Northesk, still appears to be stuck—is not the conflict that the electorate want us politicians to fight. Electorates throughout Europe, America and, indeed, the rest of the world, seek political arrangements that will produce both strong economies and social justice.

What examples can be given to illustrate the approach? Plainly, individual policies can be consistent with a whole series of approaches. One must look at a government's work in its totality to see whether what is delivered can be judged to be consistent with the principles I have described. I shall set out some of the combinations which indicate that we are adopting that approach.

I refer first to the cuts in corporation tax and the introduction of the national minimum wage. Cutting corporation tax stimulates enterprise. Introducing a minimum wage provides social justice. At no stage has the introduction of the minimum wage threatened jobs. Thus a strong economy may be coupled with social justice.

I refer also to giving the Bank of England its independence on the one hand, which provides a stable economy and moves away from the extremities of the cycle which has characterised previous governments, and developing a programme of welfare to work on the other. In addition I refer to reforming schools to ensure the better provision of state education, but at the same time tough policies on juvenile crime; giving central government greater strategic capacity, and at the same time introducing devolution; more money for health and education, and tight limits on the overall level of government spending. Those are a number of the combinations which indicate that we are approaching the issue in a way which combines a strong economy and social justice.

A number of points were raised. The noble Lord, Lord Howell of Guildford, said, in effect, that all the Third Way involves is introducing some aspects of the market economy into policies which previously were not prepared to acceptthe market economy. It is more fundamental than that. It is accepting particular goals which have hitherto been perceived to be at odds with each other when in fact they are not. What better way of providing welfare, for example, than providing jobs? That must be the greatest source for dealing with the problems of unemployed people.

The noble Viscount, Lord Goschen, referred to the Regulation of Investigatory Powers Act. I do not know enough about the detail to deal with that. He also raised the question of the privatisation of National Air Traffic Services. That privatisation is a means of ensuring very substantial investment in a service that badly needs it. We did not approach the obtaining of that investment on an ideological basis, but on the basis of what would provide the best service. We believe that the method we propose achieves that. It is accompanied by an independent regulator of the service for the first time.

Viscount Goschen

My Lords, the Minister has produced the thinnest figleaf seen in the House for some considerable time. Can the Minister explain how the approach that the Government have taken towards this privatisation of a fundamental service is any different? It seems to me very much like a "first way" or a "second way"—I am not sure which is which—rather than a Third Way.

Lord Falconer of Thoroton

My Lords, the point I have been making is that we approach these problems in a way that delivers the best solution overall. There is no ideological commitment to state control; it is simply a way of looking at what will best deliver the solution. That is what the electorate now expect of their government.

Let me conclude by covering two further points. The noble Lord, Lord Dahrendorf, said that ultimately we have not, as a government, produced a narrative to provide the big idea. With respect, I think that that is wrong. The approach that we are now taking represents, for the first time, an acceptance of the fact that social justice and a strong economy are complementary and go together.

Perhaps I may leave your Lordships with this thought. It was amusing to hear the speech of the noble Lord, Lord Patten; it was amusing to hear the speech of the noble Viscount, Lord Goschen; it was not so amusing, but interesting, to hear the speech of the noble Earl, Lord Northesk. But none even began to wrestle with the problem identified by the two speeches to which I have repeatedly referred, nor with the problems with which we, as a government, are trying to wrestle. Although it is, in a sense, easy to refer to particular difficulties, it is far more important that we are engaged on work in progress to achieve the reconciliation—which I believe we can—of social justice and enterprise.

Lord Burlison

My Lords, I beg to move that the House do adjourn during pleasure until 8.30 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended front 8.24 to 8.30 p.m.]