Europe's left-of-centre parties have discovered the `third way'

THE CENTRE-LEFT is in office, not only in Britain but throughout Europe, in a dozen EU countries. But are we also in power? Do we have the intellectual energy to change the world around us, or are we, as some suggest, condemned to trudge after right-wing ideas which flourished in the Eighties? In short - can we really make a difference?

Today, as leaders of socialist and social-democratic parties from across Europe gather in London to discuss new ideas about economics and social justice, I find myself absolutely convinced of the opposite. It is the centre-left which holds the intellectual advantage; it is our agenda which will reshape people's lives. The most important reason is that the right-wing agenda turned out to be hollow at the core. It embraced liberalisation but it left people unprepared, under-trained and often shut out of the economic revolution that was underway.

So, the left-of-centre values that we have championed for the past 100 years are needed more than ever. Our parties didn't make European history by ourselves, of course; but in this century, we made European history tolerable. Social justice, solidarity, equal opportunity and freedom for all were the ideas that drove us to create the great political innovations - universal suffrage, the welfare state, fair standards at work.

And today, those values aren't some kind of out-of-date heckle as the global market revolution sweeps ahead. Without them, globalisation would feel simply intolerable to too many ordinary people, and would fail. Our companies are challenged by mass global competition, so innovation and skill are the key to competitive advantage. Our societies are being reshaped by the revolution in women's life-chances. People want more control over their own lives, more accountability from ruling institutions, and more honesty and responsiveness from politicians.

The centre-left is developing answers for all those. I talk of a ``third way''. We can't turn the clock back to the successful policies of that long, sunny economic boom between 1945 and 1973, caused by post-war rebuilding and the recreation of world markets. But we certainly don't accept the free-market individualism of the right in the Eighties, an extreme reaction to the statism that had gone before. We don't want a messy compromise between the eras, a bit of left and a bit of right in uneasy alliance. The third way returns to the human values of the left - justice, solidarity, freedom - but rethinks how we deliver them.

In economic policy, the big debate is not about macro-economics: we are all globalists now, and the markets pass harsh judgements on economic risk-taking. But that doesn't make politics redundant, or send politicians away shrugging our shoulders. It gives us the biggest challenges of our lives.

We need to train, to educate, to break open access to capital and labour markets, to promote competition in key markets and to make sure our countries have excellent infrastructure. Other people do the actual training, teaching, competing and building. But politicians make it happen.

And we already are. Look at how Wim Kok's Dutch government is bringing down unemployment, by re-training and breaking down barriers. Or think of the challenge of social exclusion - of how a combination of bad housing, rotten education, intolerable crime, endemic ill-health and splintering families are cutting off entire communities from mainstream life. Denmark's welfare reforms have brought impressive results on that. The same goes for France.

Then think of the political challenge - the need to bring government closer to the people, restructuring services around our daily lives, rather than forcing people to shape their lives around government structures. Italy's reforms in delivering services and simplifying legislation are a good example. Just as in France, Denmark and the Netherlands, here is modern centre-left thinking in action.

Finally, there is international policy. Just as we devolve power downwards to communities and regions, so we share power upwards, where we benefit from doing so. I believe in a Europe of enlightened self-interest. And what does that mean for the EU? In a world of global markets, collective security systems and larger trade blocs, the European Union is in the self-interest of all of us. It is a practical and crucial necessity. We are stronger together than alone.

But we must not simply stop there. We have to explain and justify our vision. Our people will accept change or rebel against it depending on how and where we move closer - and how well we as politicians explain our vision.

At times, British politicians have had a reputation for finger-wagging which has not endeared them to their continental colleagues. I am very conscious that the new British Government is only 11 months old, without the long record of achievement of some of our European counterparts. But I am proud of the start we've made. Our school-improvement programme is a daring attempt to end the British disease of providing excellent education for an elite, and failing many more. Our pounds 3.5bn welfare-to-work programme for young and long-term unemployed is our far-reaching attempt to tackle social exclusion. Our reforms on economic decision-making, tax changes, and support for entrepreneurs show that you can combine competitiveness and decent standards at work.

Our programme of constitutional reform - decentralisation, Freedom of Information, rights for citizens - is long overdue. Our committed and constructive attitude to Europe is, I think, essential to our future. Our inheritance means we cannot join the Euro in the first wave, but we are committed to being enthusiastic partners in building a strong and open Europe.

No ideas? Someone else's agenda? The sceptics and doomsters should open their eyes. Across Europe, the left-of-centre enjoys a powerful reserve of successful policies and engaged, shrewd electorates. It is an historic opportunity, and we're seizing it. We are taking the historic values of the left - our long commitment to fairness, democracy and freedom - and we are applying them to our new world of dynamic markets. The aim is more cohesive, happier and richer communities. But this is not simply a vague opportunity or an aim. We are actually doing it, reforming our countries on the ground, day after day. The centre-left is in office, in power and increasingly self-confident.