New Labour has reached a crisis moment. The prime minister has led the country into its worst foreign-policy mistake since Suez. He has no exit strategy from an expensive and dangerous quagmire and in passing has wrecked his own European strategy. The episode has accelerated the political disintegration that was already besetting the government. The coalition that was brilliantly assembled in the mid-1990s – from moderate trade unionists to pro-European businessmen-is fracturing amid widespread disillusion at the government’s incapacity to move the country on from the status quo it inherited in 1997 – Euroscepticism and an uncritical commitment to the Anglo-Saxon business model.

The Iraq crisis has underlined how a political leadership that is unanchored politically and ideologically can make serious errors. New Labour’s founders were never clear about which parts of the social democratic tradition they should retain and which jettison as they wrestled with a new political landscape: globalisation, the rising power of financial markets and the media, the decline of unions and big workplaces, cultural individualism and the withering of mass political parties. It is to New Labour’s credit that it saw all this early, and its reward has been two great electoral victories.

But, as Philip Collins argued in the last issue of Prospect, having severed its ideological anchorage, New Labour has not found a secure new berth from which to develop a persuasive left of centre political narrative and sustain its broad coalition of support. It may be understandable that New Labour doubts the political efficacy of raising income tax; is sceptical about trade unions as they are currently led; wants to keep business sweet; regards universal benefits as wasteful; believes the public sector needs reform; and knows that antisocial behaviour on housing estates requires an aggressive response at which civil libertarians cavil. But it has not found a way of expressing such positions in a manner that remains compatible with core social democratic values: a belief in the public realm and social progress, and an understanding that capitalism must be seen to be fair in its operation. As New Labour has courted the Murdoch press, temporised over Europe, warmed to the American business model and attacked the BBC it is hardly surprising that so many Labour party members have blanched. And now, as the political weather turns, the disillusionment of Labour’s core base makes the government more vulnerable than it should be given the…

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