Goodhart opened his discussion of Britain by focusing on the recent difficulties of Tony Blair's Labour government, pointing out that as a result of his problems over Iraq war intelligence and university fees, his bid for a third term will be hard fought. Yet Goodhart believes Blair will ultimately be successful in his effort for reelection. This political bid is complicated by the fact that one of his major domestic efforts has been the reform of public services, and these reform measures take a particularly long time to show results that will be apparent to the voters.

Another important aspect of Blair's "new politics" is a revival of activity focused on the integration and enlargement of the European Union. Goodhart pointed to the recent highly publicized meeting of Blair with Jacques Chirac and Gerhard Schroeder in Berlin and the announced plan for the Big Three to have regular meetings to advance an agenda for Europe. Goodhart identified three large problems for Europe in the coming two to three years: how to combine efficiency with legitimacy, how to create a unifying foreign and security policy for Europe without alienating America, and how to reform the economy. He felt that some progress had been made on creating a common foreign and security policy through activities in the Congo, Macedonia, and Iran, but that the real hard issue would be creation of new capabilities for a rapid reaction force. Since this project cannot move forward without the participation of Britain, Blair is central to what will be the next big project for the European Union. With regard to the euro, Blair will probably not be able, despite his strong desire to do so, to successfully pursue a referendum for Britain's entry to the euro zone.

In a final discussion of the status of the constitutional treaty for the European Union, he pointed out that the two principal opponents of the draft which was before the European Summit last December, Poland and Spain, had a compromise ready but the Germans and the French were not willing to deal with the terms of this compromise so they brought the summit to an early conclusion. He believes a modified version of this compromise will be successful at the summit sponsored this coming June by the Irish presidency. If a constitutional treaty results from this process, a number of European countries will have referenda on a new document. Blair has said he will not have a referendum, but the Conservative party and the media will probably make a big issue of this. Goodhart concluded by forecasting that Blair was likely to win a third term at an election to be held probably in the Spring of 2005, but after serving two years he would probably turn over the Prime Ministership to his colleague, Chancellor of the Exchequer Gordon Brown.