All parties are Thatcherite now, says Mandelson

Peter Mandelson, the architect of New Labour and former cabinet minister, risked outraging backbench MPs last night by warning the Government that it must crack down on crime and illegal immigration.

The former Northern Ireland secretary also courted controversy by suggesting that, in an economic sense, "we are all Thatcherite now".

Mr Mandelson said Labour needed to learn from the defeats suffered by other European centre-left parties by confronting the issues that had led to the rise of the far right across the Continent.

His remarks followed a weekend retreat in Buckinghamshire which he organised for proponents of the Third Way from America and Europe to outline a new agenda for left-of-centre thinking. It was attended by, among others, the Health Secretary, Alan Milburn, and the Trade Secretary, Patricia Hewitt.

Mr Mandelson, who remains close to Tony Blair as an aide, pointed in particular to the experience of the Socialist Party in France, disastrously defeated in the presidential election, as an example of how the left had "lost contact" with many of its natural supporters.

Writing in The Times today, he said: "At the core of [French voters'] alienation were crime and anti-social behaviour and migration without integration, to which the left had no answer."

Mr Mandelson said there was no serious challenge on the left to Third Way thinking, which had to include a respect for economic realities.

"Globalisation punishes hard any country that tries to run its economy by ignoring the realities of the market or prudent public finances," he said. "In this strictly narrow sense, and in the urgent need to remove rigidities and incorporate flexibility in capital, product and labour markets, we are all 'Thatcherite' now."

The Hartlepool MP said Labour could not "vacate space" on issues such as anti-social behaviour or immigration, because it would then be occupied by the right. "This does not mean pandering to prejudice or headline-grabbing; it means advancing workable policies that reflect the essentially tolerant values of the majority," he said.