Racial and ethnic diversity has always been less of a problem for most of Britain than it has for Blair. What most of us long regarded as a source of cultural strength, the New Labour leadership has always deemed an electoral weakness. Driven by crude majoritarian impulses, this government has not only refused to lead a more hopeful, progressive national conversation about race, it has refused to even follow the one that was available.
Margaret Hodge's comments last week followed by Ofcom's rebuke of Channel 4 for its code breaches in Big Brother illustrate just how far New Labour had sunk. Presented with the racist views voiced by Jade Goody, our popular culture pilloried them while our political culture panders to them.
The polarising effects of terrorism and war accelerated the regression to atavistic notions of Britishness and race. But they didn't start it. As Blair leaves office he has the curious distinction of having realigned the level of public racial discourse with his own - by lowering it. This was no accident. The pressure came not from voters but within New Labour, which for all its bravado was always an essentially defensive project. Emerging from 18 years of electoral defeat, it identified itself not by what it could be but by what it would no longer be - namely old Labour. Race and immigration were regarded as achilles heels of the old.
But while the spin doctors were still working from a playbook written in the 70s, the rest of the country had moved on. Thanks primarily to demographic drift and cultural engagement, the number of those willing or able to imagine Britain without non-white people had dwindled. Labour's first term saw Chris Ofili and Steve McQueen win the Turner Prize, White Teeth win the Whitbread, Ali G emerge as a comic force, and the number of non-white MPs double.
The issues of race (the colour of people) and immigration (the movement of people) were decoupling. Britishness was losing its synonymity with whiteness and its antithesis to blackness. Racism had not disappeared; but it was no longer the electorally potent force it had once been either. In 1997, the BNP had no council seats. According to a Mori poll six weeks before the election, the country ranked race and immigration the 12th most important issue - just below inflation and above BSE.
So from the outset, the potential existed for New Labour to play midwife to a confident, inclusive, hybrid sense of Britishness. Instead, it sought to strangle it at birth. Less than a month before polling day, Peter Mandelson unleashed Fitz the bulldog on to a party political broadcast. "The Labour party is the patriotic party," he explained. "[The bulldog] is an animal with a strong sense of history and tradition. The bulldog is a metaphor for Britain." For a party seeking to present itself as a modernising force, this was a curious choice of metaphor. The bulldog signified the land of John Bull and empire, not Kelly Holmes and Little Britain.
Shortly before the last election, Blair promised tougher asylum and immigration legislation against the backdrop of the white cliffs of Dover. Had he stood again, we might well have witnessed a walkabout down the Old Kent Road flanked by a Pearly King and Queen to the soundtrack of Chas and Dave. These anachronistic symbols belied chequered legislative and political achievements. The Stephen Lawrence inquiry, the resultant Macpherson report and the Race Relations (Amendment) Act were particularly high watermarks; the asylum bill, ID cards and loyalty pledges were particularly low.
New Labour understood that racism was bad; it just never quite grasped that anti-racism was good. Progressive initiatives were overshadowed and undermined by crude rhetoric. In the days following Le Pen's election success, David Blunkett echoed Thatcher's fears of being "swamped" by non-English speaking immigrants; Ruth Kelly spoke up for "white Britons [who] see the shops and restaurants in their town centres changing [and] do not feel comfortable". Peter Hain blamed "a minority of [isolationist] Muslims for [leaving themselves] open to targeting by racists and Nazis".
Over the decade, the ethnicity of the scapegoated "other" kept changing. At different moments the focus shifted from asylum seekers to Gypsies to Muslims to eastern Europeans. The basis for the fear changed too: from drugs to jihad, from race to religion, from crime to culture. Often the scapegoats were in fact white. Indeed, the only thing that has remained constant was the need for an "other".
As ever, this "other" was most useful in helping the powerful define themselves. In a period of globalisation, devolution and post-colonial decline, defining contemporary Britishness went from parlour game to profitable industry. Those most keen to define us were most likely to violate the principles by which they defined us. Even as they shot innocent young men on the tube and at home, or tortured them abroad, they told us we were a "tolerant", "welcoming", "law-abiding people", who championed "fair play". "Liberals" who once argued for integration now demanded assimilation; those who had called for assimilation now made the case for exclusion. Debates about race became a race to the bottom.
None of this denies the daunting challenges this government has faced. Immigration has escalated massively and there are finite public resources. The trouble is that New Labour contributed in no small part to these developments. Specifically, it backed EU expansion - a good move, but with consequences and clearly without adequate preparation. More generally, the neoliberal policies it has supported at home and abroad created a vulnerable low-paid workforce that feels threatened by those seeking asylum from poverty and war.
Which brings us to Iraq, where Blair helped create far more asylum seekers than he ever took in. The overwhelming majority of Britons opposed the war and terrorism. We have ended up with both - expanding the market for Islamophobia and jihad, and returning the myth of the west's civilising mission to an ever degrading public discussion.
And so it was that as Blair's term draws to a close, the popular proved too weak to resist the reactionary overtures of the political. Race and immigration are now key issues facing the nation, and the BNP has 56 councillors. Schools are more segregated, and society more fearful and divided. Popular culture took Jade Goody down. But the politicians who embrace her agenda have risen to new depths.
· This article was amended on Monday June 11 2007. The phrase is 'achilles heel' rather than 'achille's heel', as it was used in this article. This has been corrected.