King Of The World

By Barry Hillenbrand/London

When the other leaders of the G-8 nations arrive in England for their annual summit this week, they will be greeted by the famously toothy smile of British Prime Minister Tony Blair. They will switch on their smiles too, but mostly for show. Bill Clinton is stuck in the mire of the Lewinsky matter. Germany's Helmut Kohl is facing a September election he may not survive. Japan's Ryutaro Hashimoto is struggling to keep his government and his country's economy from collapsing. Boris Yeltsin is in poor health and is a political lame duck.

But Tony Blair? Make no mistake about it, that big smile is the real thing. He has just completed his first year in office, and by nearly every measurement, things could not be better. He is more popular now than when he won his landslide victory. His 72% approval rating in the polls is the highest first-year score for any British Prime Minister of either party since World War II. His Labour government is so far ahead of the opposition Tories in the national polls that the party of Margaret Thatcher, which dominated British politics for a generation, has almost disappeared as an effective political force. Blair is arguably the most successful politician on the face of the earth.

To cap off his year in office, Blair helped engineer a historic peace agreement in Northern Ireland and last week managed to reassert a British presence in Middle East politics by sponsoring a high-profile negotiation in London. The British economy is booming: the pound is up, and unemployment is down. Peace and prosperity. Who could ask for anything more? But just in case someone does, there's Britain's current boom in the arts. Whether it's movies like the The Full Monty, bands like Oasis and the Spice Girls, or designers like Stella McCartney, the hottest thing going these days seems to come from what is cloyingly known as "cool Britannia." And while Blair admits that this artistic blossoming was under way before he took office, he and his coterie of young advisers have relentlessly, even shamelessly, courted and promoted the hip as a way of announcing to the world that Britain is changing.

"Modernization" is the young Prime Minister's mantra. After Blair became leader of the Labour Party in 1994, he waged a bitter fight to reform it, moving it away from its tired socialist roots and forcing it to embrace elements of Thatcherism. As Prime Minister, he has embarked on a mission to modernize Britain and its politics. The grand design is not entirely clear. "He's not an ideologist," says Oxford University political scientist David Marquand, "but he wants an ideology. In a kind of intuitive way he knows what he's against and perhaps what he is for." Blair is utterly pragmatic. If it works, it's good, no matter whose idea it was. Blair has made no effort at disassembling the many reforms instituted by Thatcher and denounced at the time by Labour. So state industries remain privatized, unions are still reduced in power, businesses deregulated, and government spending held in check. That stance irritates Conservatives, who feel Blair is getting the credit they deserve. Blair, grumped the right-of-center Economist, is the "strangest Tory ever sold."

Blair says he wants "an efficient market economy coupled with social justice." Unlike Thatcher, Blair thinks the government does have a role to play in helping people and assuring social justice. He is spending $4.33 billion on a welfare-to-work training program for young unemployed. The program is not unlike Bill Clinton's welfare-reform plan and assumes that the best thing for the poor and disadvantaged is education, so that they can pull themselves up by their bootstraps.

The welfare state is being reformed, not dismantled. Blair has put a stop to the attempts to privatize the National Health Service begun under Thatcher. He poured an extra $3.3 billion into the NHS, which provides free universal care for all Britons. During the election, Labour pledged to reduce the number of people waiting for elective medical procedures, but despite the new money, the waiting lists have actually increased in his first year.

Blair is succeeding by governing from the political center rather than from the left or the right. His youthful enthusiasm and energy add to his popularity. He has a canny sense of the nation's moods. When Princess Diana died last summer, Blair instinctively knew when to speak, the right thing to say (he called her "the people's princess") and when to keep quiet. He privately offered advice to members of the royal family on how to make amends to a public annoyed that the royals were not sharing in the outpouring of grief that followed Diana's death. Blair's people helped organize the funeral. They put up loudspeakers in parks and along the route traveled by the funeral cortege so that the people could feel they were part of the funeral of the people's princess. It was a classic Blair touch.

Blair is not a confrontational politician, preferring to build coalitions across class and traditional political divides. He has enlisted top business executives to serve in his government and has gained respect in a constituency traditionally hostile to Labour. In addition to working to blur the ideology divisions in British politics, he has begun to smooth down the sharp edges of class warfare so destructive in Britain. He has worked hard to win the loyalty of middle-class voters in England, who have always been leery of the socialist agenda of the Labour Party. For years the party was dominated by working-class politicians, often from Scotland, and raised most of its money from contributions by the unions. Blair broadened the party's membership base and funding. Today union money makes up only 30% of the Labour Party's budget, down from 50% three years ago and from 80% in the 1960s.

While Blair has a fine instinct for finding the middle political ground, he has been willing to take risks, as he did in the Northern Ireland peace talks, and to pick some real fights. A mini-revolt broke out on the left of his own party when he pushed through a reduction in welfare benefits for single parents. Forty-seven Labour M.P.s voted against the bill, and four Labourites resigned junior positions in the government. But with his massive majority in the House of Commons (the bill passed, 457 to 107), this was no real threat to his leadership. Similarly, some Labour M.P.s were appalled when the government imposed a $1,600 tuition fee on state-university students. "I really despise what Blair has done," says an old-line Labour M.P. "I do not want a Tory as leader of the Labour Party."

In the coming year Blair will undoubtedly be involved in more confrontations when Labour attempts further reform of the welfare and state-pension systems. Says Anthony Giddens, head of the London School of Economics and one of Blair's intellectual gurus: "It is a measure of the success of his program that he has alienated some people of the old left. We have to accept the idea that there are too many people on [welfare] benefits and who are not involved in the labor force." Blair will offer those people training and a job, but he is prepared to cut their benefits if they do not cooperate with his program to improve their lot.

The lack of effective opposition from the Tories and the skill of a corps of loyal Labour spin doctors salted around the government have allowed Blair to get away with blunders and embarrassments. Just before a European Union vote to ban cigarette advertising in sports, Blair agreed to a personal and private Downing Street meeting with Bernie Ecclestone, major domo of grand-prix motor racing and, as it was later revealed, donor of $1.6 million to the Labour-campaign war chest. News of the meeting and the contribution leaked out after Britain backed a delay on the ban for grand-prix cars. The furor was intense. Labour returned Ecclestone's money. Blair subjected himself to a television interview to apologize for the inconsistencies in his stories and promised legislation to regulate campaign contributions--and poof!, the controversy died. It would never have happened in Washington, but London is not on the Potomac and Blair is not Clinton.

Indeed, there are few politicians precisely like Blair these days, although it is not for lack of trying. "Blair, not Clinton," writes Paul Johnson, the curmudgeonly historian who once lauded Thatcher's conservative policies, "has become the world's most imitated politician." In Germany, Gerhard Schroder, the Social Democrat who will face Kohl in the election in September, has taken to sounding a bit like Blair when launching into discourses on modern socialism. Dutch Prime Minister Wim Kok, whose Labour Party improved its position in an election last week, is also something of a Blair sound-alike. And the Blairites are quick to point out other centrist politicians in Australia, New Zealand, Italy and Portugal.

While Blair may have become something of a political phenomenon in Europe, his politics continue to defy definition and cause confusion. In March, when, in fluent French, Blair became the first British Prime Minister ever to address the National Assembly in Paris, he was greeted by applause from the right of the chamber when he praised business deregulation and flexible labor laws. The left side remained silent until he called for a campaign against "social exclusion," then it broke into cheers. Winning applause from both sides, Blair later said in what could be the most coherent statement of his ideology, "is good politics." French commentators called it le Blairisme, and Blair's spinmeisters call it the "third way." Whatever it's called, it works, and British voters love it. That keeps Tony Blair smiling.

--With reporting by Jay Branegan/Washington and Helen Gibson/London

With reporting by Jay Branegan/Washington and Helen Gibson/London