Well, did they? Yes. The economy boomed, unemployment plummeted, inflation too, debt was repaid, virtually everyone got richer. Poor pensioners and poor children saw a sharp increase in the support they get from the state; primary schools and hospitals improved: most of the things that government affects got measurably better.
All that and some socialism, too. Labour came to power promising almost nothing, getting its disillusion in first with a paltry five easy pledges and a risibly timid campaign song (Things Can Only Get Better). The tactic worked so well that later radicalism barely registered. Who ever imagined New Labour would make a pledge Keir Hardie would have blenched at? The party's founder promised the minimum wage - implemented in April 1999 - but not the abolition of child poverty. Who ever thought New Labour would end pensioner poverty in four years? (Those promises are even more radical considering the definitions of poverty used are proportions of earnings at large: as earnings rise so must benefits.)
If the message was muffled, it is because the Blair government has been so ambivalent about what it stands for that it did not dare trumpet these successes, for fear the Daily Mail might hear. It was socialism by stealth and limited, for this was done by distribution of new wealth, never taxed directly away from the better off.
Early on Tony Blair said he would fail if he did not leave a fairer society behind. The gap between rich and poor has not lessened - the distribution of wealth has probably got even more skewed - yet the lot of the poor has improved more sharply than at any time since the founding of the welfare state. A quarter of the 4m poor children have been lifted out of poverty. Weekly income for the poorest pensioners will have risen in April from £68.80 in 1997 to £92.15.
The basic state pension will be up for rich and poor alike by £5 plus the £200 fuel allowance. The working families' tax credit now helps 1m poor working families, none now living on less than £214 a week. Income support for children rose by 72% in real terms, child benefit for all by 25%. In April every household with children where earnings are under £40,000 gets £520 a year instead of the old married couples' allowance of £285.
Yet curiously none of this is the story Labour tells about itself. For this has also been a deeply conservative government, dogmatically attached to private finance and privatisation, for the tube and air traffic control. On the same side of the ledger Jack Straw pushed the population in prison up by 6,000 at a time crime has been falling and no more criminals were being caught. Asylum seekers were ritually abused (though few got sent back). There was pandering to Murdoch and the Mail, who still kicked them in the teeth.
Labour, the neo-conservative party, promised no rise in income tax. It even cut the basic rate by 1%, perpetuating the Tory myth that voters can have low tax and good public services. Labour talked rights and responsibilities but no one breathed a word about the obligation on the rich or business to contribute more as wealth soared, while capital gains tax was cut and inheritance tax withered to virtually nil.
How people rate the Blair government depends critically on their view of its first two years, when Labour accepted the Tories' punitive spending plans, lone parent cuts and all. This delayed the rolling out of Labour's best projects, action on the 2,000 worst housing estates, better treatment of young offenders, Sure Start for babies and a national programme for childcare. The spending pledge postponed improvements in health and education, which in turn led to public disappointment.
But was that severe early restraint necessary? Even as the crowds were still celebrating on May 2 1997, inside No 10 the Blairites were reining in expectation, damping down excitement. They never quite believed in their victory, fearing the vanquished Tory foe would still rise from its grave. Full of folk memories of City panic on Harold Wilson's arrival in power, they feared a run on the pound, a flight of capital, spiralling inflation, all the Labour ghosts. Remember, too, that in spring 1997 the economy was predicted to turn down by October: the Bank of England pondered only whether it would be a hard or soft landing. In the event nothing happened. So with hindsight, it is easy now to see the first two years as a sorry waste. But who could have guessed then that the coffers would overflow?
But now the money is in there can be no excuse for timidity in a second term. Labour's fearfulness postponed a decision on the euro that could have been taken at a gallop in the flush of their election victory. Yet Tony Blair was brave over Kosovo when he did the right thing for its own sake. On Labour's watch the world took a few stumbling steps towards greater mutual responsibility for human rights and human welfare: perhaps the very facility with which Labour resorted to the language of rights was itself progress. Labour led in cutting third world debt. Arms sales continued but at least more transparently than anywhere else, with details and destinations of shipments published for the first time.
Constitutional reform brought representative government to the nations of the UK, the routing of old ermines from the Lords and a mayor and assembly for London. Devolution was badly done by a leader loath to let go, but done it was. Nothing much was done about the Commons. The promised strong draught of freedom of information was watered down as Labour ministers succumbed to a bad case of executive-mindedness. No coherent constitutional template was formed and critical questions of public sector morale and organisation dodged - which Labour will regret if it gets another term. Proportional representation for Scotland, Wales, Northern Ireland and European parliament elections sparked no enthusiasm for electoral reform at Westminster. The Blair vision of realigning the parties through PR, so making the 21st century safe for progressive government, got nowhere.
So what is the final tally? If money in the pocket measures a government's success, the prosperous have prospered but so have the poor. If it is public confidence in the state and the services it supplies, then those two years of Tory spending were an error, which is being compounded by Labour's refusal to tax more. On present policies, there will never be enough to raise UK provision to European standards.
As we trawled through departments examining what Labour did, we were puzzled by how a government famous for glossy annual reports and permanent spin had failed to communicate so much of what it was really up to. This has been a remarkably busy government. But unless a policy becomes a battle, a scandal or a joke it vanishes into the ether, virtually unreported. Our book ignores the Westminster soap opera in favour of hard evidence on change accomplished, outcomes measured. On that basis we have to conclude it has been a good government, blessed with fortunate circumstance. Had Labour been less afraid of its own shadow, less in thrall to a dead Thatcherite past, how much better it could have been - and might yet be.
Extracted from Did Things Get Better? by Polly Toynbee and David Walker published by Penguin Books on 22 February at £6.99.
