Lecture 12 The Labour Party and the Origins of New Labour

1. Lecture 12The Labour Party andthe Origins of New Labour Dr Tom Quinn GV204 – The New British Politics 22 January 2008

2. Outline • Aim of lecture: To examine briefly the Labour Party’s history and then explore the phenomenon of ‘New Labour’ • Formation of the Labour Party • Previous Labour Governments • Labour’s ‘modernisation’ under Blair • Ideology of the ‘Third Way’ • The record of New Labour in Government

3. British Socialism • Parliamentarist, ‘moderate’, gradualist • Ethical socialism – Christian morality • Fabians – rationalism > morality; state planning • Trade unionism • Values: equality, community, cooperation, public ownership (Clause 4) • ‘To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution, and exchange, and the best obtainable system of popular administration and control of each industry or service.’

4. Formation of the Labour Party • 19th century – strong trade unions in UK • Labour Party formed in 1900 • Response to legal attacks on unions • Dominated by unions – hence, ‘Labour’ Party • Party of the organised working class • Socialist societies (e.g. Fabians) • Extension of suffrage 1918 • Overtook Liberals in 1920s • Labour Govts in 1924 and 1929-31 • Party split in 1931

5. Attlee Government 1945-51 • Nationalisation of key industries • Welfare state (Beveridge Report) • Formation of National Health Service • Keynesian demand-management • High-water mark of British socialism – and accepted by Tories in 1950s! • Opposition in 1950s – splits between Left and Right in Labour Party

6. Labour’s Problems in Govt: 60s & 70s • Wilson Govts 1964-70 and 1974-76 • Economic recessions • Dilemma: maintain high spending and redistribution – or target inflation? • Conflict with unions • Callaghan Govt 1976-79 • End of ‘tax & spend’ statist consensus • ‘Winter of Discontent’ 1978-79 – wave of strikes that brought down Labour Govt

7. Wilderness Years: 1979-97 • 1979-83: shift to Left – electorally damaging • Formation of SDP in 1981 • 1983-92: ‘modernisation’ under Kinnock • Abandoned left-wing policies on economy, defence • Centralised power inside Labour Party • Four consecutive electoral defeats • 1992-94: Smith – reformed link with unions • 1994: Blair elected as ultra-moderniser

8. Blair: Modernising the Labour Party • Rebranded party as ‘New Labour’ • Tackling internal opponents (Left & unions) • Rewriting Clause IV • Confront 4 major changes • Electoral – popularity of Tory policies • No return to ‘tax-and-spend’; tough on crime • Sociological – demise of working class • Appeal to ‘Middle England’ • International – globalisation • Ideological – socialism and fall of communism

9. Ideology: The Third Way (1) • Anthony Giddens – sociologist, former director of LSE: The Third Way (1998) • ‘New Times’: social, economic, technological change • No alternative to the market & globalisation • Demise of class politics • Constraints on the state • But invest in education, infrastructure, communications to compete in global economy (‘enabling state’) • New social contract: rights and responsibilities • Moving beyond ‘Left’ & ‘Right’: ‘radical centre’

10. Ideology: The Third Way (2) • Ideological values • Equality? Freedom? Fairness? • ‘The reason for the changes we are making is not for their own sake but because they are the means to the fairer society, where aspiration and opportunity are open to all’ (T. Blair, speech at LSE, 2002. My emphasis) • Values: ‘… equal worth, opportunity for all, responsibility and community’ (T. Blair, The Third Way, 1998) • Criticisms • Vague and incoherent – all things to all people? • Too many concessions to neo-liberal economics? • Or just latest form of social-democratic revisionism?

11. Community Consumers Post-industrial economy Equality of opportunity – training and education Welfare-to-work Rights & responsibilities ‘Mixed economy’ in public services Market economy Regulate private sector Working class Producers (unions) Industrial economy Equality of outcome – redistribution Welfarism Social & welfare rights State provision of public services Mixed economy Nationalisation New Labour Versus Old Labour NEW LABOUR OLD LABOUR

12. Blair’s First Term in Govt, 1997-2001 • Cautious start 1997-99 • Bank of England independence • Emphasis on sound economic management • Constitutional changes • Welfare reforms – ‘New Deal’ • Big spending increases in 2000 • Healthcare & education – but also tuition fees • Foreign policy – pro-EU

13. Blair’s Second Term, 2001-05 • Dominated by foreign policy – 9/11, Iraq • Domestic policy – big spending increases and some tax increases • But more emphasis on reform of public services – marketisation, choice in education and health (limits of the state) • Foundation hospitals; university top-up fees • Blair & Brown – conflicts over reforms

14. The Growth of the State Source: HM Treasury, 2004 Spending Review Note: Expenditure in 2004-05 prices

15. Interpreting New Labour • New Labour’s Third Way: alternative to neo-liberalism and old-style socialism • Did policies reflect value of ‘fairness’? • New Labour as Thatcherism: continuation of neo-liberalism • Did policies reflect value of ‘freedom’? • New Labour as Old Labour: traditional ‘tax-and-spend’ socialist Govt • Did values reflect value of ‘equality’?

16. Conclusion • To what extent is New Labour a break with the Labour tradition? • What does New Labour see as the role of the state? • Key to understanding New Labour’s ideology • Does New Labour have an ideological vision of ‘the good society’? • ‘The fair society’? • Did New Labour’s policies on public services and economy reflect values of the Third Way?