A WONDERFUL YEAR, TONY, BUT WORSE IS NOW TO COME; I Have Been Observing Prime Ministers for over Half-a-Century and Have Seen What Office Does to Them . . . and with Blair I Have Seldom Seen a Friend Age So Fast

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TONY BLAIR has had a good first year. To find an incoming Prime Minister who did better in his first 12 months you would have to go back to Harold Macmillan in 1957.

Blair critics sneeringly refer to him as 'Supertone'. That is an error.

The great cartoonist Vicky tried to laugh Macmillan off the stage by branding him 'Supermac'. Later, Macmillan used to drawl to us at the Beefsteak Club: 'Best thing that ever happened to me', while Vicky ruefully admitted: 'My worst mistake.' Blair may be Supertone but the year has taken its toll. I have seldom seen a friend age so fast. He looks tired and careworn, as though the burdens of the world rest on his shoulders, as indeed to some degree they do. Since entering No 10, he has ceased to be a young man and become definitely middle-aged.

But he still smiles. And his smile is genuine.

Blair is a happy man, with a wonderful family and a job he loves and knows he is good at. He has said to me more than once in the past year: 'I can't believe it's all real.' I will be frank. I like and admire Blair, and my regard and admiration has increased during past year. I have been observing Prime Ministers for nearly half a century and have seen what office does to them. When Blair took over No 10, I said: 'Promise me you will say a prayer each day not to be corrupted by power,' and he said he would.

I believe he has kept that promise and power has not corrupted him. He is still spontaneous and genuine. He lacks arrogance - so far.

Blair retains his natural good manners, and anyone who does him a service is sure to get a hand-written letter of thanks, however busy he is. He jokes.

He has fun. Not least, he listens he has always been a good listener, and he retains this valuable asset.

It is valuable because, though Blair entered Downing Street very ignorant in some ways, especially in foreign affairs, he has learned a lot, fast. He is a keen, quick student, just like Margaret Thatcher before him.

A year ago there were some areas where I knew more than he did. Now I can hardly think of one. He is rapidly acquiring a mastery of detail over the whole scope of government.

So much for Blair the man.

Let us look at his record. First the good news. Where Blair has been personally in charge, the results have been outstanding.

What determines the success or failure of governments is not so much policies as events, especially unexpected ones.

The disaster in Blair's first year was the death of Princess Diana, and the appropriate response to it. A chasm threatened to open up between the people and the Establishment.

Blair bridged that chasm. He handled this potential crisis with skill and so averted it.

He applied the same sure touch to foreign affairs. His relations with Bill Clinton are excellent and my political and military friends on both sides of the Atlantic unite in saying that the 'special relationship' has never worked better. The results are perceptible in every field, from Ireland to Bosnia and the Middle East, and in many secret matters, too.

Some people think Blair went too far in being nice to Clinton.

But as Blair said to me: 'I really like him. He has been straight and decent with me and that's what I go by.' There speaks a sensible man of state.

Blair gets on with our European partners better than any Prime Minister since Winston Churchill. He has made friends with Chancellor Helmut Kohl and his likely successor in September, Gerhard Schroeder.

That is an achievement.

BLAIR had a huge success in Paris with his speech in French to the parliament. It is a curious fact that, just as the world went for Thatcherism in the Eighties, so it is now going for what the French like to call le Blairisme. It is he, not Clinton, who is the world's most imitated politician.

This popularity, which essentially springs from his innate friendliness, has helped Blair in negotiations. In getting the Irish peace agreement, he rightly and characteristically paid generous tribute to the work of John Major. But I am not sure Major could have pulled it off. Blair did.

This agreement holds hidden dangers but it is the lesser of two dreadful evils and Blair was right to take the risk.

On the back of the Irish settlement, Blair has been able to intervene successfully in the Middle East, and summon the contending parties to London.

He was a hit with my prickly friend Benjamin Netanyahu, and that augurs well for the success of the conference.

It is more than 25 years since Britain has taken a successful individual initiative in this key part of the world and, as the Foreign Office mandarins will tell you, the credit belongs to Blair personally.

What about the Government as a whole? There are three substantial achievements.

First, Blair and Gordon Brown have managed the economy with sense. Both of Brown's budgets have pleased the City, business and the public alike.

All previous Labour governments ran into economic difficulties during their first year of office. Not so this time. Blair and Brown have been helped by an expanding economy. But they have also judged things well, taken no risks and listened to, among others, the Governor of the Bank of England, Eddie George.

AS A RESULT, the pound has rarely been stronger. As against the franc, it is at a higher valuation than at any time since the Twenties.

Second, Frank Field has made an excellent start at reforming welfare, the most important target Blair has set himself. It is going to be a long job, but the important thing is that everyone accepts that reform must come in some shape and the argument is only over the details.

Third, Jack Straw has done a good job at the Home Office, persuading an apprehensive middle class that Labour in power will not mean a crime wave, a police force on the brink of mutiny, or any relaxation in the war against drugs.

Straw has, indeed, emerged as the real No 2 in the Government, the man Blair trusts and consults most. Brown has been caught out plotting and John Prescott, though popular in an elephantine way, is too talkative. So Straw is seen by Blair as 'the safe pair of hands'.

The other Cabinet success story is Mo Mowlam, who must be accorded equal credit with Blair for the Irish settlement.

However, that is the end of the good news. All the rest is bad, some of it horrible. The Cabinet is second rate. Blair knows this. It is not his Cabinet, but a group chosen by the Labour Party, for all kinds of personal and political reasons which have little to do with government ability.

Some of his ministers are just as bad as the Cabinet. Harriet Harman, I am sorry to say because she means well - is unfit for high office. She is unperceptive and not bright.

Jack Cunningham has failed as Minister of Agriculture and some ministers are able in the wrong jobs. Robin Cook failed to grasp the essential point about being Foreign Secretary: you speak platitudes in public and tell the truth in private. By shooting his mouth off to the Press, Cook has alienated five important countries - India, Indonesia, Turkey, Saudi Arabia and Israel with doubtless more to come.

His boast that the Labour Government would last for 20 years revealed his arrogance, also reflected in the way he handled his divorce and remarriage.

YET Cook is needed.

Blair regards him as the ablest performer in the Commons. His right job, then, would be as Leader of the House, especially since the Government has a heavy legislative programme to get through.

But would he see it as demotion and leave to make trouble on the backbenches? It will be a mark of Blair's persuasiveness to get Cook to see reason.

Peter Mandelson has also had a rough year, being landed with the hopeless job of the Millennium Dome, and given no proper responsibility. He is anxious to get away from the cloak-and-dagger side of politics into proper departmental work.

Blair likes him and wants him at his side. So it would be shrewd to make Mandelson Foreign Secretary, a job for which his discretion and astonishing industry make him well suited. He and Blair would still work closely together. Has Blair the nerve to take this big calculated risk?

Then there is Derry Irvine, said to have the best brain in the Cabinet, but with the propensity which is fatal to a politician - he is accident-prone.

Blair and his wife Cherie see him as their mentor and think the world of him. The public see him as arrogant, extravagant, selfish, undemocratic and rude. He has made himself a joke figure and looks grotesquely out of place in a Labour government.

So what to do with him? I expect Blair will do nothing, and hope that Irvine's luck will turn. But he should have the courage to say to his former boss: 'One more disaster, Derry, and out you go.' As all Prime Ministers learn in time, butchery is a necessary art.

Blair's first Cabinet reconstruction, therefore, must be on a large scale and it should be extended to the Government as a whole.

At least three dodgy ministers should be got rid of. They include Geoffrey Robinson, who has turned out to be as accident-prone as the Lord Chancellor, and has brought the Government into far more disrepute.

The last government was destroyed by time, but it was devastated by scandal. Tony Blair's Government will be seared just as surely as Major's was unless he devises effective machinery for spotting rogues in the corridors of power and ensuring they are kept clear of decision-making.

Indeed, enough has happened in the first year to persuade me that Blair's administration is no better than Major's on the ethical front quite possibly worse. I foresee big trouble ahead.

Trouble ahead, too, over the mass of constitutional reforms which are being introduced, especially Scottish devolution.

It raises complex and delicate issues about the balance of power between Edinburgh and London.

LABOUR has not really thought through some of the difficulties. Nor has it pondered what it will do if there is a hostile English backlash. Old House of Commons hands tell me: 'Believe you me, devolution will make precious little difference in practice. It is all a con, really! ' I am not so sure.

What I am clear about, and have warned Blair accordingly, is that it is notorious that tinkering with the constitution always raises immense unforeseen difficulties - especially in parliament.

I predict all these constitutional projects will turn sour before they are through, and that by the end of this parliament, Blair will wish he had never heard the words 'constitutional reform'.

Two other major dangers are looming. First early next year, in the light of the success, total failure or - more probable - qualified failure of the EU common currency, Blair will have to decide whether and when to join it.

This is likely to split his Government and party.

Second, if history is any guide, we are heading for recession, and by this time next year we will be in one.

Blair has no experience of how difficult it is running a country in recession. He will learn, the hard way.

Blair has got through his first 12 months virtually without an opposition.

Whether William Hague is too busy reorganising his party in his image to bother much with Parliament, or whether he is effective in the Commons but makes no impact outside it, the result is the same.

For all practical purposes, the Opposition does not exist and this is reflected in the polls.

For Blair, such a blissful Garden of Eden experience will not continue.

The serpent will soon appear. His first year can be summed up in two sentences. The best has been wonderful. But it is over, and worse is to come.