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- guardian.co.uk, Sunday June 10 2001 01.40 BST
The Government has been given another opportunity to deliver significant improvements to public services. The biggest mistake Labour can now make is to believe its own spin and ignore the warning contained in the lowest turnout since 1918.
The issue that will now dominate politics and rip through the Tory party is Europe. Hague's attempts to panic people did not register with the public, which is both an indictment of his leadership of the Conservative Party and a criticism of the timidity with which the pro-euro case has been put.
The defeat of the Tories means there is now no reason for the Government not to start campaigning for entry into the euro, combined with a decision to go for an early referendum. Leaving it too late could transform it into a mid-term referendum on the Government's popularity.
But this Parliament could never be simply a choice about a currency. The re-election is about a much broader view of what our society should look like. It means combining the prosperity that will be underpinned by entry into the Eurozone with the high quality public services that are the essential building blocks of a modern European country. The Labour manifesto has opened a debate on the public services which will be central to the choices the Government now makes.
Labour successfully saw off the Tory demand for tax cuts by urging voters to defend public services. One by-product of that success is that public opinion is now even more focused on the quality of these services. The importance of this issue therefore goes way beyond Labour's core supporters.
This debate will be fought on the issue of the quality of public services. The Tories spent the 1980s exploiting widespread dissatisfaction with the public sector to their own electoral advantage. The lesson of this experience is that the public sector must be responsive to the needs of those it serves.
This is why I conducted an international search for the best possible management for London transport, and was delighted to be able to appoint Bob Kiley - widely regarded as having turned around the blighted New York subway system - as the Transport Commissioner for London.
We should not be afraid to expect the best for our public services, including learning from outside the public sector and ensuring the best management, if we want to expand and improve those services. While a dynamic economy is able to provide most citizens with a share of prosperity, only the public sector can deliver services such as education, health and transport, which the vast majority in our society, not merely the poorest, need in order to ensure a decent quality of life.
The centrality of the public sector in our national life means we have to repudiate the dogma that the private sector has all the answers. At the most basic level, it is more expensive to deliver public services through the private sector because in the end the private sector must pay a dividend to its shareholders. This extra cost is often expressed not to the immediate buying customer - such as national, regional or local government - but to the public themselves, whether through more expensive services, or badly provided ones.
No one seriously argues that a private sector monopoly is good for the economy, and yet the privatised chunks of the public sector are almost always monopolies. If there is a shining example of what is wrong with a privateering agenda for the public services, then Railtrack is it. Its creation was one of the most disastrous and wasteful experiments ever conducted. Railtrack is a mechanism for siphoning off subsidies from the taxpayer and passing them on to shareholders while presiding over the collapse of the national rail system. Railtrack's failure has been rewarded with ever greater grants from government. It has absolutely no commercial pressure to improve its service - it faces no competition and no incentive to succeed.
Given the sound economic case for the public ownership of Railtrack and popular support for its renationalisation one has to conclude it is purely a political decision that has prevented Labour from committing itself to bringing Railtrack back into public hands. This decision was a mistake, which I believe should still be reversed.
Labour's biggest problem since 1997 has been the growing disaffection of many of those who voted for the party at the last election. The root cause of that public mood was that by the mid-term of the last Parliament there were not enough improvements in our public services. This was a direct consequence of the decision to stick rigidly to Tory spending limits for the first two years.
Labour is now committed to expanding public expenditure. None the less, the delay in spending more on the public services made itself felt throughout this election campaign, not least in the low turnout. The capacity of politicians to show by their actions that voting makes a difference is bound to affect whether the public thinks it is worth voting.
I canvassed for 11 Labour candidates this time, eight of whom won for the first time in 1997. In both marginal seats and solid Labour strongholds I found widespread support for the return of a Labour government and deep hostility to the Tories. I also found a real sense that the voters were consciously giving us a second chance. Everywhere I found voters genuinely wanted Labour to do well - but this means doing more, and more quickly, to improve the delivery of services.
One of Tony Blair's biggest challenges is to reconnect in the minds of the public the idea that voting makes a difference - delivering on the public services is the key to doing so.
• Ken Livingstone is Mayor of London
