How will Labour deal with real life?

Forget the landslide - Mr Blair's team must cope with the global changes that will affect us all
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"When this election of yours is over," a Norwegian university professor has just written to me, "I hope your paper will broaden its mind a bit again ... okay, of course politics matters, but it sure matters less than your current coverage indicates. Write more about gene technology, the Internet and other processes that will change the way we live. Tony Blair won't. All right: he will, a little."

It is always good to see ourselves as others see us, but I am particularly grateful to the Norwegian professor for pointing out the limits of politics at this particular time. There is such an expectation of change, and such a element of (albeit understandable) glee among Labour supporters that we need people to remind us that the election of Tony Blair will only change our lives a little.

How much depends on the extent to which he, and the people round about him, understand these big forces for change, and then whether they shape their policies to channel and use them, or resist and challenge them. Do you lean with the wind, or do you spit into it? Try this test. Let's list five of these forces, the processes that will change the way we live, and see to what extent New Labour's ideas do dovetail with them.

Start with the rising power of global finance. That power has been climbing for the best part of two decades, so New Labour has had plenty of time to come to terms with it, but Gordon Brown managed to take the markets by surprise yesterday by pushing ahead more quickly than they had expected with the plan to give the Bank of England freedom to set interest rates. This is simply taking further a series of reforms started by the previous Government, and merely brings the Bank to about the middle of the independence league rather than being a bit below it. So we are catching up rather than pushing ahead. Nevertheless, it is a clear sign that politics are going with the flow of economics. Score: Plus.

Next, take the changes taking place in the world labour market: greater competition from workers abroad, the shift towards self-employment, part- time working, job growth in smaller companies and so on. Here, the new policy is the application of the European social chapter. The changes in the labour market have undoubtedly created great social tensions, in particular the conflict between the insiders - people who have good jobs and want to keep them, and the outsiders - people who are unemployed, or underemployed and would like to do better.

The problem here is that the Government is adopting an old-fashioned social model, one invented the best part of a decade ago in a quite different economic environment, and one which has subsequently been discredited as increasing the gap between insiders and outsiders. The practical reality may be that the new Government had no option but to sign up, and it may well be that it will start to develop a more appropriate model in the coming years. But so far, the score is for a minus.

Number three is demography, the ageing of the developed world. This will lead to a series of changes in both our economies and our social attitudes. On economics, there is the obvious practical need to establish adequate pension provision as well as bringing about other changes such as making it easier for older people to do part-time work. Here, the appointment of Frank Field, perhaps the most thoughtful politician in the country on this subject, to think long-term about pensions is a clear sign that the new Government grasps the significance of the problem. Score: Plus.

Will the Government also be sensitive to the shifts in social attitudes that an older world will generate? Harder to say, but I rather think so. It may seem odd to suggest that the youngest prime minister this century will be able to act as a channel for older values, but in a way New Labour seems to represent these values better than old Tory. We will see: no score, just a point to watch.

Four - technology and in particular communications technology, for the rapid advances there will be the main way technology makes an impact on the world through the next five years. (Sure, bio-technology is enormously important too, but I think the practical consequences of advances there will not be making a major impact on our lives in the next 10 years - it is the decade beyond that.)

The revolution in telecommunications is not just a result of the Internet, though that is a key part of it. It is also slashing prices of telecommunications world-wide and transferring knowledge even more rapidly across the world. There is also a surge in global TV channels, growth in international trade in on-screen white-collar services, and so on.

What do governments do about this? The short answer is "let it happen". This is an area of economic development that has to be bottom-up rather than top-down, for we can only see what will win from the market signals. The UK starts from the advantage of a liberal telecommunications regime, and that will presumably continue. Presumably, too, the general tone of the Government will be "technology-friendly". Whether it realises that this technology is immensely liberating in that people no longer need to be here, or indeed anywhere in particular, is another matter.

The location of on-screen jobs is going to be one of the great areas of economic competition over the next five years, much more important than, say, the location of car assembly plants. Do they understand this? Do they realise that even the great on-screen money-making machine of the financial services industry could be challenged from abroad? It is not yet possible to score this one, but watch it closely.

Finally, education. More than any other single input, the quality of human capital will determine economic success - and, I guess, social success, too. But the lags are very long. Only one 40th of the work-force turns over each year, so while the key to the very long-term future may lie in the nursery schools, the key to the next decade lies in patching gaps in people's education and "retrofitting" us with new skills. Does New Labour grasp this, or does it still think of education in terms of schools and universities? Score? Again, we just don't know.

What we do know is that these forces will march on. The total score above is a couple of pluses, a minus, and a lot of don't knows. Our lives will, a decade from now, be very different for reasons which have nothing to do with politics. Some aspects will be worse than today, but fortunately there will still be some politicians upon whom we can - wholly unfairly - pin the blame.

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