I am delighted to be here this morning at this conference organised jointly by the Social Market Foundation and the Konrad Adenauer Stiftung. And it is a particular pleasure to be sharing a platform with Friederich Merz, the leader of the Christian Democrats in Germany. We first met last year in Berlin. Since becoming leader of the CDU in the Bundestag he has been a powerful voice against the so-called Third Way and its advocates on the political left.
As one enemy of the Third Way to another I should like to say how very welcome you are here today.
Today's Conference has of course been planned to coincide with the launch the pamphlet that has been drawn up by members of the British Conservative Party and our colleagues in the CDU. It underlines the close relationship that exists at all levels between the British Conservative Party and the CDU, relations that were reinforced only a few weeks ago at meetings both of the EDU in Berlin and the IDU in Singapore. I should like to thank all those politicians and academics in both parties who have contributed to this initiative, and on the Conservative side pay a special tribute to Stephen Dorrell for his work in bringing this together.
The purpose of the pamphlet is very clear. To demonstrate that whatever our differences, Conservatives and Christian Democrats should never lose sight of the many values that we hold in common. Unlike socialists and their fellow travellers on the left who hide behind the vacuous slogans of the Third Way, we do not believe in a rigid doctrine or blueprint for society that should be applied universally and in all circumstances. We do not believe in a single prescription for all of society's ills. And, unlike the left, we do not look to the State to supply all of the answers.
As Conservatives and Christian Democrats we have far too much respect for the traditions, cultures and instincts of our individual countries to be seduced by that. We do have different histories, different traditions, different political systems and different cultures. But that does not mean that as politicians of the centre-right we cannot share similar values, similar principles and similar approaches to politics without being identical in every respect. Because I believe that all of us have in common what was once described in Britain as a 'conservative habit of mind'.
That is very well reflected throughout this pamphlet so that, while you would not expect me to agree with every word or sentence in it, I have no problem whatever in endorsing the overall approach it takes. In particular I welcome its commitment to upholding freedom of the individual, coupled with the promotion of individual responsibility. I welcome its emphasis on respecting our institutions, and commitment to free and democratic societies. And I welcome its championing of the free market economy as a bulwark of political liberty and the foundation of economic prosperity.
So I believe that this initiative does point the way as a model of co-operation between our two parties and hope that it will be the first of a number of such initiatives. It also demonstrates once again that, although the Conservative Party has distinctive policies on issues like the euro, we remain fully committed to European co-operation and to Britain's full-hearted membership of the European Union. I need hardly remind this audience that there is only one leader of a major British political party today who has campaigned at a General Election on a platform of British withdrawal from the European Union - and it certainly was not me.
The launch of this pamphlet takes place at a fascinating juncture for the political right. As we are all aware, the past few years have been far from easy for both of our parties. In 1997, after many long years in office and achievements to our name, the Conservative Party was defeated at the polls. The CDU in Germany underwent a similar experience a year later. Yet as this pamphlet so rightly points out 'both of our parties experienced the paradox of victory of our ideas but defeat at polls'.
We were faced with parties that changed their leaders, re-packaged their brand and sought, especially here in Britain, to distance themselves from their pasts. They adopted our language of enterprise and the market economy, they wrapped themselves up in our rhetoric and in some cases they stole our policies. And in order to make what was a gigantic exercise in cynical political opportunism sound instead like a coherent political philosophy they even gave it a name. In Britain they called it the Third Way. In Germany it became 'Die Neue Mitte'.
For much of the 1990s the Third Way appeared to be irresistible and unstoppable. Third Way governments were established first in the United States, then Britain and next in Germany. As a result, the parties of the centre right, accustomed to long periods in government, were on the defensive. They were uncertain of how to attack their opponents and unsure of how to adapt their own agendas to the new political landscape.
It is now my confident assertion that this period of defensiveness and uncertainty has come to an end. It is now the parties of the centre right, Conservatives and Christian Democrats, who have a great opportunity not only to take on but to defeat the parties of the Third Way.
I believe it is becoming clearer than ever that the Third Way has been a monumental fraud. It is, what Tony Blair's chief polling adviser famously described in a leaked memorandum last year as a 'brand'. And like every brand it relies for its appeal on a combination of gimmicks and packaging.
For the truth is that, unlike Conservatism, the Third Way and the parties of the left who have embraced it have no coherent set of principles and no intellectual substance. Their principal weapons are spin, distortion and cynical manipulation of the message. Yet when they come to face the ultimate test of actual delivery they are a dismal failure.
That is the real lesson of the Third Way. While its followers talked the language of enterprise, of freedom and of markets, in order to be elected, they never really believed it, still less did they understand it. As you say in your pamphlet their conversion to a market economy 'sounds rhetorical and has shallow roots'. And as a result, once in office, they have quickly reverted to type. In other words they talk right, but in every area of policy they act left. They say one thing and they do another.
Even in the areas where the public most believed that the Third Way could make a difference - in the public services - they have failed to live up to the extravagant promises and expectations. They are all spin and no delivery.
The failure of the Labour Government in Britain stands as a metaphor for the hollowness and failure of the Third Way everywhere. And it is a striking example of the failure of the Third Way and its advocates to understand the nature of the world and the way in which it is changing. Nowhere is this more evident than in responding to the opportunities thrown up by the new global economy.
Every instinct of the left is to seek to control, to regulate and to intervene in a global market whose very nature defies all of those things. They believe that the answer to the power of global markets is to extend the power of governments. That is why we have seen left wing governments across Europe introduce whole swathes of new social legislation and protection.
But the desire to extend the power of the state is not limited to national governments. For the proponents of the Third Way, national governments and nation states are themselves an anachronism. They believe in huge centralised monoliths. Or put another way, global markets require government on a global scale to regulate them.
I fundamentally reject this prescription. Even if it were possible to regulate the new economy - about which I am hugely sceptical - I believe it would still be highly undesirable. As you have put it in your document 'democratic parties should be constantly vigilant against seductive arguments for 'controlling' a future which is unknowable'.
Like you, I believe in a different approach to the challenges of globalisation. It is what I call the dynamic approach, based on lower taxes, lighter regulations and competition. As you rightly say 'national characteristics, far from being impediments to globalisation, are precious assets global competition. In fact global competition encourages, rather than represses, national diversity'.
I agree strongly with all of that. In the new global economy, diversity and flexibility are absolutely key requirements. And it is for those reasons that the British Conservative Party believes that Britain's economic interests are best served by keeping the pound and why, at the forthcoming General Election, we shall be arguing strongly the case for keeping the pound.
At that Election the Conservative Party will be ruthlessly exposing how the British version of the Third Way, New Labour, has failed to deliver. But, as the election of George W. Bush proved, defeating the Third Way requires much more than that.
Like all the parties of the centre right, we need to give people a positive reason for rejecting the Third Way. I believe that we are now in a position to do precisely that. That is why we will be putting forward the most exciting and dynamic Conservative programme for a generation.
It will be a programme based on the common agenda and values that both Conservatives and Christian Democrats share and are set out in the document you are launching today. It will be a programme designed to tackle head on the challenges that you so clearly identify - building a dynamic market economy that delivers sustained prosperity, responding to globalisation, promoting a new framework of freedom and responsibility, strengthening the rule of law and building a welfare system that meets the needs of this century rather than the middle of the last. Above all it is an agenda to show that the Third Way has had its day.
At its heart will be a number of familiar Conservative themes. There will be tax reductions focused on those who have been hit hardest by New Labour's stealth taxes - such as hard working families, businesses, pensioners and savers. At the same time we will spend only what the nation can afford. So we will increase public spending year on year in real terms, but we will only do so within the trend growth rate of the economy as a whole.
Lower taxes are a central element of our common agenda. They underpin the kind of free society in which we all believe. They are the pre-requisite for a dynamic, prosperous and successful economy. And they are morally right, giving people back more of what they earn, encouraging greater personal responsibility, compassion and independence from the State. So the next Conservative Government will deliver on tax.
But our programme goes much further than that. As George W. Bush demonstrated, a fundamental reality for Conservatives and parties of the centre-right in the new millennium - if we are to take on the left and beat the Third Way - is that we have to develop bold and distinctive social policies that address what is known as the quality of life agenda. It means tackling the issues that have sometimes been seen as the sole preserve of the left and demonstrating how it is us, rather than them, who can deliver real improvements.
So we will wage war on the scourge of crime like never before with policies that back the crime fighters and not the criminals. We will set schools free of local bureaucracy and centralised Whitehall control by giving them back to parents and teachers. We will end political interference in hospitals so that doctors and nurses can get on with the professional job they were trained to do. We will embark on a radical programme of welfare reform. And we will set about reversing the decline of many of our inner cities through a regeneration policy that tackles both the symptoms and causes in a more co-ordinated and focused manner than ever before.
Nearly two years ago, when many commentators thought that the kind of politics epitomised by the Third Way was unstoppable, Tony Blair declared war on the 'forces of conservatism'. He made it his declared objective of the twenty-first century to defeat them for good. But the mistake he made was to underestimate the enduring strength of the forces of conservatism.
He misunderstood that it is Conservatives, rather than the liberal elites of the Third Way, who genuinely speak for the common sense instincts of the great mainstream majority of people. Now the forces of conservatism are no longer in retreat, but are back on the offensive.
In the United States we have seen how the Third Way can be beaten. And by translating the kind of approach set out in the joint Conservative and CDU document we are launching today, into common sense policies for all the people, I do not believe it will be long before the Third Way in our two countries is beaten too.