Leading article: The three tests for the Blair government

IT IS TEMPTING to suggest that the next year will define Tony Blair's government, as the Prime Minister and his party face up to challenges on the economy, Europe and the constitution. That temptation should be resisted. We thought it would become clear what kind of animal New Labour was once it assumed office: yet its inner nature remains elusive. If we have learnt one thing about Mr Blair it is that he avoids definition, not out of shyness but on principle. The refusal to be pinned down is the core of his strategy.

Mr Blair promised he would be "radical" and that, at least, he has turned out to be, although not in the way that was expected. He is radical in the sense that he has revolutionised the business of responding to and managing public opinion, turning democratic leadership into a continuous marketing and public relations exercise. The cost of this approach has been a loss of authenticity. We are used to politicians tailoring their message to what the voters want to hear, but when we suspect that "what the voters want to hear" is the starting-point of Mr Blair's message, it begins to sound hollow, and the lack of authenticity begins to become a liability, even in marketing terms.

So it was good to see a flash of the real Blair in our interview with him last week. What remains attractive about him is his refreshing pragmatism and his lack of attachment to ideology.

His intention to fight the next election promising lower rates of personal taxation - especially for lower-income families - is a genuine and welcome "third way" between Tory and Labour orthodoxies. It is to his credit that he fails to conceal his contempt for some of the sentimental mush that passes for Labour's "traditional values" - and it is depressing that the party is still so immature that it thinks that electing Liz Davies to the National Executive will act as a constructive influence on government.

But then the doubts creep back in: it must be asked whether it is sustainable for the Prime Minister to run against his party so much of the time. Attacking Old Labour may have been fine as an opposition tactic to persuade the electorate that he is New, but it is unwise if he wants to create a body of support that will act as ambassadors for his government, because the danger of the mid-term is that dissent in the party could act as a focus for worries among the wider public.

The first challenge for the next year is the economy. The problem is not so much the substance of economic policy but the style. One of the few broad-brush promises that will have lodged in the minds of even the least attentive voters is the pledge to end the cycle of boom and bust. Never mind the small print: the Prime Minister last week acknowledged that he could not abolish the business cycle - he and Gordon Brown are simply trying to "reduce its amplitude". They have created an expectation that the economy will tick along in fourth gear for ever, and the voters will punish them when the Bank of England is forced to strain the engine for a bumpier ride.

The second, related, challenge is that of the euro, which will be launched in three months' time. That event will have profound effects on our national psychology, not to mention the pre-eminence of London as a financial centre. It is time for Mr Blair to raise the tempo and begin to make the case for joining, rather than saying he sees no obstacle in principle if others make the case for him.

The third challenge is that of constitutional reform: as Roy Jenkins comes up with his compromise between the irresistible force of change and the immovable object of the voting system; as the House of Lords finally arrives in the 20th century; and as Scotland begins to break away from England. On electoral reform, Mr Blair is right to be cautious: he should encourage real pluralism at all levels of government. That means moving quickly to a legitimate method of selection for the Upper House: it should be half elected and half appointed by an independent body. And it means letting go in Scotland, allowing the people to decide their future. As for the way we elect MPs, the case for change is overwhelming; the case for any particular form of change has not yet been made, and needs to fit with changes to the Lords and to the government of the different parts of the United Kingdom.

There is, though, much more to pluralism than this. The receding of a Freedom of Information Act is disappointing. The gentleness with which Rupert Murdoch's monopolistic media tendencies have been treated is depressing. The excessive prescription in education policy should give us pause.

Performance on the economy, Europe and the fabric of our democracy would matter less if other parts of Mr Blair's extravagant rhetoric had not already crumbled on contact with reality. The notion that his administration would rank as one of the great reforming governments of the century on the basis of its plans for transforming the welfare state has vanished like a half-recalled dream in the morning.

However, if Mr Blair can establish himself as economically competent, internationally pro-European and politically pluralist, that would be a great achievement for his first term. Of these, the most difficult and unconvincing, on the evidence so far, is pluralism. We are not persuaded that New Labour revels in the idea of letting a thousand flowers bloom and a thousand voices speak.