Why Blair must give power to the people

Thatcher's heir faces tough choices to prove he is a true radical. Hitting the moguls won't be enough

It must be lonely being Tony Blair. That may seem a strange thing to say about somebody with a close family and a tight-knit personal office, who is courted and flattered by everyone from Rupert Murdoch to the youngest Sedgefield party worker. But to lead a party as he has chosen to lead Labour is an immensely lonely thing.

Blair, like Margaret Thatcher, is not really a party person. He has eschewed the warm embrace of ''being Labour''. He has no deep tribal tradition to fall back on. Despite a numerous and growing group of individual admirers, the party as a whole looks at his progress from outside, half appalled, half entranced. For him this ups the stakes. If things go well, they will follow him in a dazzle at a distance - rather as the awestruck Tories followed Margaret Thatcher. If things go badly, the same people will turn on him, I guess, with equal savagery.

So though when he accepted Murdoch's invitation to speak in Australia, we muttered of Blair, ''Doesn't he know who his friends are?'', the truth is that he hasn't got those kinds of friends. He ''owes'' nobody - not in the media, not in the unions, not in academia or business. In opposition, he has been preparing well for the loneliness of the long-distance premier.

Since he so keenly holds out the Thatcher comparison, it is one to dwell on. The key is that she confronted and challenged powerful forces and by doing so released national energy. She attacked the trade unions, Whitehall and the liberal establishment and, through deregulation, the traditional state. Those assaults hurt a lot of people but allowed others to make money and fight their way up. By destroying, she liberated.

This unleashed behaviour she didn't much approve of. The yobbishness and greed of the boom years contradicted her austere personal ethic. Brought up to believe in thrift, savings and restraint, she was partly responsible for a time of glut, blow-out and crudity. She never properly confronted this apparent contradiction, either at the time or afterwards. We must assumeshe believed simply that it was worth it - energy is coarse and revolutions leave casualties.

For Blair, as a ''left Thatcherite'', the questions are straightforward: which important institutions does this other moralist intend to take on, and how precisely does he hope to unleash a similar amount of energy?

In Australia, Blair listed what appeared to be some of his initial targets. They included the hereditary peerage, restrictive practices in the legal system, the ''old boys' network'' in the City, the obsolescence of the parliamentary system and the public school-biased intake of Oxford and Cambridge.

These are all worthy enemies, though I await with some scepticism Labour plans to reform Oxbridge entrance, the public schools and City networking (the latter being more meritocratic than ever before, largely because the good chaps have been bought out by Germans, Swiss, Japanese and other non-Etonians). But this list doesn't seem big enough or central enough. Few of us feel tied down or held back by the House of Lords or restrictive practices among barristers. It is all a bit beside the point.

To understand what institutions and forces Labour needs to take on, we have to remember the big picture. Power has been privatised, or at least passed from states to corporations and to markets. The centre of our society has veered away from the social values, all those quasi-religious, humane and hard-learnt lessons of civilised life which Blair, for one, is in public life to assert.

The great task for politics now is to tilt the balance back. This means, first, confronting some of the new sources of power head-on. Corporate Britain and the multinationals have accumulated great powers over the past decade; as the abortive British Gas shareholders' revolt showed recently, there is a big agenda of corporate reform and regulation for Labour to tackle.

And it includes the monopolistic challenges of the Murdoch empire itself. Blair spoke of the old boys in the City; the real old-boys' network today, the new establishment, were the people listening to him at Hayman Island in Australia. These wire-pullers and influence-pedlars are infinitely more powerful than any doddery home-grown clique. A Labour government which fails to regulate them fairly could hardly be called reformist.

The second, more positive, part of the task is to give people a stronger sense of ownership over their lives and communities to balance the great global forces beyond national regulation or control. In Australia, Blair put it like this: ''The central question of modern democratic politics is how to provide security during revolutionary change.''

The problem, though, is that traditional government structures cannot provide that security - again, something Blair acknowledged in Australia. Echoing a long-time theme of Paddy Ashdown's, he spoke dismissively about ''vote for us and we'll cure it'' politics, and noted: ''As a result of social and economic progress, government does not have the power over its citizens to enforce the change it wants.''

This sums up Blair's dilemma as a radical politician. Many politicians yearn for ''power over citizens''. It's gone. It's history. The missing power that matters today is the power of citizens to affect the world around them. And that power is at least partly recoverable. As soon as people have a sense that they can really affect things that touch their lives, whether they be local schools, or hospitals, or neighbourhood policing, or the state of local parks, they are likely to rediscover social purpose.

Returning usable power to communities is the way to release a new wave of energy - and it was significant that Blair formally ''came out'' as a communitarian at the weekend. What he called ''the active will of the people'' is still there, but it has been dammed and frustrated for years.

However one looks at it, the purpose of ''left Thatcherism'' must involve both taking on corporate power and also pushing political power down to the level of regions, communities and localities, with unpredictable consequences. It would mean bravely taking on corporate moguls, who purr at him now. More courageously still, it would mean decentralising - letting go, just as Thatcher let go when she deregulated the economy.

Is Tony Blair ready to take that quantum leap? With a reputation for control and discipline as a party leader, is he prepared to release national energy when he gets into Downing Street, rather than trying to repress it? Would he accept that the Scottish parliament will be very different to the Westminster tradition? Would he allow people in Birmingham, Sussex and Cumbria to run schools, drugs projects and urban regeneration schemes in ways he disapproves of? Is he, in short, the kind of radical who really wants to restore the roots? One of the ones who means it?

That is the biggest question in British politics today. Tony Blair is the man who can either transform our political system, or who can end up with Rupert Murdoch's arm round his shoulders and a bitter, let-down nation cursing his name. It is a lonely business; and like all long-distance running, it is ultimately a question of character.