New Labour may be the child of Thatcherism, but it is not its clone

New Year's Day is a somewhat arbitrary anniversary in the political calendar. True, New Year messages are being issued by the respective party leaders reflecting on the previous 12 months and talking up their prospects for the year ahead. But at the beginning of May 2004, two far more significant anniversaries will occupy the energies and attentions of politicians and commentators. That period will mark the 25th anniversary of Margaret Thatcher's election to power and the 10th anniversary of the death of the Labour leader, John Smith, who was succeeded, two months later, by Tony Blair.

Appropriately, Politico's bookshop has published a series of essays on the political legacy of Baroness Thatcher. With Mr Blair's seventh anniversary as Prime Minister also falling in May, there are bound to be renewed assessments on whether history will judge either to have left substantial political footprints. The essays are largely a eulogy to Thatcher's accomplishments, but the contributions that particularly caught my eye were by Dennis Kavanagh, Professor of Politics at Liverpool University and Dr Tony Wright, the Labour MP who chairs the Public Administration Select Committee.

Both reflect the view that Thatcher's greatest legacy was the creation of New Labour and that, without her, Tony Blair could never have become Prime Minister. Dr Wright pays tribute to Thatcher for shaking up the post-war settlement, but says she failed to put it back together again. In key areas such as trade union power and the disciplines of the market, she cleared roadblocks and opened up new directions. "This is the sense in which Mrs Thatcher is the midwife of Blairism."

But Dr Wright is emphatic that Blairism is not Thatcherism and that while both are modernising creeds, "one is market modernisation, the other inclusive modernisation - one knows the distinction between a market economy and a market society, the other did not". But he concedes she helped to make Blairism possible. "This may even come to be seen as her lasting legacy."

Professor Kavanagh is more forthright and argues that New Labour is both a product and vindication of Thatcherism. The sweeping changes which the party has made to its structure, policies and ethos "mark the success of the Thatcher project".

On the major technical indicators of the way the economy is being managed - with control of inflation still the primary function of macroeconomic policy - Mr Blair's government can certainly be said to be protecting the Thatcher legacy.

Her denationalisation of state industries and efforts to increase private ownership of property and wealth have also been maintained. The abrogation of the previous central Labour policy objectives for the state to own and control the principal methods of production, distribution and exchange - Clause Four - is a lasting political tribute to Thatcherism, which might not have occurred under a different Labour leader. Whether Gordon Brown would have abolished this fundamental statement of intent is a moot point.

Yet Blair's philosophy will surely never take root as an "ism". Perhaps there is no such thing. Maybe "isms" are not something to which politicians necessarily should aspire. I was not sure, at the time, that even Mrs Thatcher sought an "ism". Her goal of increasing home ownership was originally rooted in electoral calculations to win Tory votes from former council house tenants. And to achieve this, through decidedly un-Thatcherite tax breaks, there was even a willingness to disregard the basic logic of Conservative taxation theory. It took years after she was gone to finally remove such market distortions with, ironically, Gordon Brown finally achieving this part of the Thatcherite taxation agenda.

If there is an "ism" that sums up Blair, could it simply be straightforward, old- fashioned, Christian Socialism? His rejection of Mrs Thatcher's approach that "there is no such thing as society" is perhaps the greatest difference between the two. Mr Blair may not talk about fair shares for all, but he has managed to commandeer the word "fairness" for New Labour. This has created the new ground on which all political parties must now fight for space. If the Tories are to be electable, Mr Blair's legacy is that they now have to submit each of their policies to such a test. Hardly a political conference slogan - Tory, Labour or Liberal Democrat - is complete without this word. Mr Blair has successfully introduced this concept into modern politics - and made it his own.

Of course, "fairness" is a pretty fatuous concept in practice and its overblown use by everyone in politics has rendered it virtually meaningless. But it sounds good, and somehow it still appears more believable from the lips of Tony Blair or Gordon Brown than from any Tory. This is the new rhetorical ingredient that has been New Labour's most important addition to the Thatcherite mixture. And notwithstanding Mr Blair's lack of historical perspective, he understands that markets are grounded in cultures, institutions and communities.

The Conservative Party is still paying for appearing to repudiate the whole philosophy of social justice and equality. This lingering image problem will be the first priority of Michael Howard in 2004, as his honeymoon draws to a close. If he succeeds, he will get a hearing for his detailed policies. And if this does occur, it will be due to a legacy that the Tory party will have inherited from Tony Blair rather that Margaret Thatcher.

On an international level, the original Blair project looked like marking out a substantial break with Thatcherism, which became associated with a rejection of the central European project of ever-closer union. This was not her starting point. Indeed, in the early years, the Tory party made much of Labour's commitment to withdrawal from the EU. But Thatcherism stumbled along the anti-European path due to the good personal relationship Mrs Thatcher forged with Ronald Reagan - a relationship that contrasted sharply with her debilitating arguments with President Mitterrand and Chancellor Kohl.

Blair initially saw an opportunity to stake out his own ground by re-engaging with Europe. All that now looks like turning into his greatest failure. He, too, looks to be stumbling along a path that leads him to be defined by his relationship with the White House rather than with Brussels.

Of course, he owes this to the fall of Thatcher in 1990, just before the first Gulf War. Writing in her autobiography, she implies that George Bush Sr. allowed Saddam Hussein to remain in power. "One of my few abiding regrets is that I was not there to see the issue through. The failure to disarm Saddam Hussein and to follow through the victory so that he was publicly humiliated in the eyes of his subjects and Islamic neighbours was a mistake which stemmed from the excessive emphasis placed right from the start on international consensus."

Tony Blair will be forever defined by the Iraq War and his relationship with George W Bush. And he has the legacy of Thatcher's absence from the stage in 1991 to thank for that.

mrbrown@pimlico.freeserve.co.uk