My party is more ideologically united than I've ever known it

There are bound to be setbacks. There are bound to be attacks. We will respond to them, robustly

TODAY, WHEN I speak in the South African parliament building, I will be talking about New Labour and the Third Way. Yet it will not simply be a domestic speech, because I believe the Third Way is part of the new politics of the centre and centre left, which applies internationally - in South Africa, in Europe and elsewhere. In Britain, it means New Labour.

It is as New Labour that we were elected. It is as New Labour that we have governed. And it is as New Labour that we will continue to govern.

Labour as a party is now more ideologically united than at any time I have known it. In party terms, that is the real achievement of New Labour. New Labour now runs deep: deep in the principles of our party, deep in the membership of our party, and deep in the people of our country.

When I sat down in South Africa yesterday with Deputy President Thabo Mbeki, he wanted to talk about the Third Way. The scale of the problems his country faces may be greater than those we face at home, but they are the same problems and we can offer each other ideas and support in putting together the solutions.

I define the Third Way in three areas. Firstly, the economy - rejecting the old left's belief in a trade-off between growth and inflation, and the old right's throwing people at the mercy of change. Instead, we will found growth on fiscal and financial prudence, sort out the public finances, create a new role for government in education, and with small business as an enabler of economic success, and establish a tax regime that stimulates hard work and rewards effort.

Secondly, a modern civic society which embraces opportunity and responsibility, and combines rights with duties. So we've cut youth unemployment by more than 30 per cent and reformed taxes and benefits, and we're bringing in the working families tax credit to help people who are disadvantaged. But we're also reforming welfare, tackling crime and reshaping the youth justice system. People believe in a strong society. But they want strong rules, too.

And thirdly, freedom and liberty. A broader idea of freedom than that of the old right: a freedom to do things, as well as a freedom from things. Freedom to have better housing and to be able to get a job; freedoms enshrined in the rules of law, in a free press, in a modern constitution.

In Britain, this Third Way is now being spelt out in a massive programme of change - change which is about getting the fundamentals right, about getting right the things which were got wrong during 18 years of the Conservatives. Getting long-term interest rates down to close to 4 per cent - the lowest for 30 years. Putting the extra pounds 40bn investment into our schools and hospitals, and seeing the results and improvements we want - and, yes, dealing with problems in education and the health service which arise. But, in all the areas where we are putting in money, coupling it with a demand for reform. Making sure crime keeps on falling. Sorting out the welfare state, with the biggest-ever welfare reform bill coming up in this parliamentary session. Bringing in the working families tax credit to help poorer families. Cutting youth unemployment. Helping small businesses. Improving relations with Europe and the world, so that Britain is no longer lost in isolation.

These are principles and practices which are now going into place around the world. South Africa, for instance, won praise for its tough economic measures, and for sticking to them. They're right. It's the only way. Today, I will be working to ensure the best links between Britain and South Africa, paying tribute to the extraordinary and visionary leadership of Nelson Mandela, and forging new relationships with Thabo Mbeki and others in the new job they will do for South Africa.

For this is a year of challenge. I know that in Britain, many people are facing the future with apprehension, unsure of what it will bring. But I know too that if we work together to meet those challenges, we will defeat them. Nobody said it would be easy to rebuild Britain. Nobody ever went into government thinking that it would be a nice, easy, nine-to-five job. It takes resolve, determination, real grip and a sense of purpose and direction. That is what New Labour offers. That is what I offer. Strong leadership. Real leadership. Leadership the country wants and deserves.

Strong leadership is not an end in itself. It is for the purpose of making every family better off and giving every child a chance. Those are worthwhile goals. But they are tough goals too. There are bound to be setbacks. We will face them, determinedly. There are bound to be attacks. We will respond to them, robustly. That means that we will continue to concentrate not on the politics of scandal and gossip, but on the politics of the fundamentals and of the big picture - getting on with the job we were elected to do. That will be clear in the new proposals we will be bringing forward shortly on the wide range of issues we outlined in our legislative programme. It will be clear in the Budget. It will be clear in the series of speeches which ministers will be giving on what the Government is doing, starting with David Blunkett today when he makes it clear that we will not tolerate local education authorities which fail and let down our children.

After 18 years, none of Britain's problems can be solved in the same number of months. That will take time. But we are seeing results, such as waiting lists coming down - by 150,000 since April in the biggest sustained fall in the history of the NHS. Work has already begun on nine new hospitals, out of the 25 major new hospital developments that we have agreed. Employment is up by more than 450,000 since the election. Unemployment is down by 300,000 over the same period. More than 100,000 children are now benefiting from smaller infant class sizes. More than 6,000 schools have already had money for badly-needed improvements. We have pledged an extra pounds 1.24bn to modernise the police over the next three years. We have seen the first overall drop in crime since current surveys began. We are setting aside pounds 800m to tackle the poorest areas of our country. We are modernising public transport with a pounds 135m boost. We have injected pounds 1.4bn into science.

These are good initiatives, and good results. We want to see more results, and better results. But we are making a difference.

And we will make a difference because we will carry on putting forward a sustained programme of modernisation, and because we will carry on offering Britain the new politics on which we were elected. We will continue to offer confidence, direction, vision and optimism. After years of the Tories giving none. We will continue to be for the many, not the few. We will continue to offer leadership, not drift. We will continue to be for the future, not for the past. We will continue to govern. And we will continue to govern as New Labour.

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