Getty
Show Hide image

Anthony Giddens: The rise and fall of New Labour

The architect of the Third Way on the Blair-Brown years.

The era of Labour hegemony is over. How should we assess its legacy? It is conventional these days to disparage Labour's record in government over the past 13 years. Even sympathetic observers argue that little of substance has been achieved. For the more determined critics, Labour in power - Labour as New Labour - has been more than a disappointment; it has been a disaster. The party led an onslaught on civil liberties, betrayed leftist ideals, failed to make any impact on inequality and, worst of all, embarked upon a calamitous war in Iraq. New Labour had promised a "new dawn", and many feel betrayed.

I have some sympathy with these criticisms. Yet it is possible, nevertheless, to mount a robust defence of many of Labour's core policies. And a balanced assessment is needed if the party is to chart an effective path in the future. A realistic starting point for doing so is to compare Labour's period in government with those of its sister parties in other countries over roughly the same period - Bill Clinton and the Democrats in the US, Lionel Jospin's Socialists in France and Germany's SPD, led by Gerhard Schröder.

Labour managed to stay in power longer than any of these - longer, indeed, than any other left-of-centre party in recent times, including those in Scandinavia. The ideological changes associated with the invention of the term "New Labour" were a large part of the reason for this electoral success. "New Labour" was not an empty soundbite designed to disguise a vacuum where policies should have been.

From the outset, the architects of New Labour offered a compelling diagnosis of why innovation in left-of-centre politics was needed, coupled with a clear policy agenda. In outline, this diagnosis ran as follows: the values of the left - solidarity, a commitment to reducing inequality and protecting the vulnerable, and a belief in the role of active government - remained intact, but the policies designed to pursue these ends had to shift radically because of profound changes going on in the wider world. Such changes included intensifying globalisation, the development of a post-industrial or service economy and, in an information age, the emergence of a more voluble and combative citizenry, less deferential to authority figures than in the past (a process that intensified with the advent of the internet).

Most of Labour's policy prescriptions followed from this analysis. The era of Keynesian demand management, linked to state direction of economic enterprise, was over. A different relationship of government to business had to be established, recognising the vital role of enterprise in wealth creation and the limits of state power. No country, however large and powerful, could control that marketplace: hence the "prawn cocktail offensive" that Labour launched in the mid-1990s to woo the City of London.

The expansion of the service economy went hand in hand with the shrinking of the working class, once the bastion of Labour support. Henceforth, to win elections, a left-of-centre party had to reach a much wider set of voters, including those who had never endorsed it in the past. Labour could no longer represent sectional class interests alone. In Tony Blair - not a Labour tribalist by any description - the party seemed to have found the perfect leader to help it further this aim.

Labour's policies evolved during its years in government. However, some core ideas remained the same. Economic prosperity, in a global­ised marketplace, had to take primacy as the precondition of effective social policy. An increasingly prosperous economy would generate the resources to fund public investment, dispensing with the need to raise taxes. Labour sought to break away from its previous predilection for tax-and-spend. "Prudence" was Gordon Brown's watchword as chancellor. Prudent economic management was essential if welfare spending was to rise and social justice to be enhanced.

Here, Labour had to struggle with the disastrous legacy of the Thatcher years. Inequality had increased more steeply in the UK during those years than in any industrial country except for New Zealand (which had also followed Thatcher-style policies). The welfare system was run-down, so investment in public services, coupled with reforms designed to make them more flexible and more responsive to the needs of their users, became a guiding principle. Labour was to be the party not of the big state, but of the intelligent state.

A further important strand of New Labour policy was its refusal to allow any issues to be "owned" by the right. The task, rather, was to provide left-of-centre solutions to them. This strategy became the focus of attacks by critics worried about its implications for civil liberties, but was vital to Labour's longevity in power. Social democrats fell from power in other countries because of their failure to do the same. In the past, the left had tried to explain away, rather than confront directly, questions having to do with crime, social disorder, migration and cultural identity - as if the concerns citizens had about such issues were misplaced or irrelevant. It was assumed, for example, that most crime resulted from inequality, and that once inequality was reduced, crime would inevitably decline. Without denying the connection, New Labour took a different view. Tony Blair's 1997 manifesto pledge "tough on crime and tough on the causes of crime" was not just a slogan; it was adopted as a principle of policy.

It might seem a long way from these concerns to New Labour's emphasis on the need for an activist foreign policy. But it is not. Because of globalisation, domestic and foreign policy now overlap each other far more than previously. Britain faces no visible threat of invasion, but must be prepared to assume an active role in the wider world. Interventionism becomes necessary doctrine when national sovereignty has lost much of its meaning and where there are universal humanitarian concerns that override local interests. Transnational terrorism, itself a creature of globalisation, is a threat far greater than the more localised forms of terrorism prevalent in the past.

How far did these strategies and policies bear fruit? Labour's record is distinctly patchy, but it would be hard to deny that it has had far more impact than did any of the other centre-left governments mentioned above. The UK enjoyed ten years of unbroken economic growth, not to be dismissed as simply based on a housing and credit bubble. That growth took place alongside the introduction of a national minimum wage. Large-scale investment was made in public services and significant reform was achieved in the areas of health and education.

Wage and income inequality was contained, though not significantly reduced. The position of the poor, however, improved substantially. Targets to reduce child poverty were not met, but before the recession 600,000 children were raised out of relative poverty; measured against an absolute standard, the number is about twice that figure.

The New Deal, Sure Start and tax credit policies have all had their difficulties, but have mostly proved their worth. Even the much-derided PFI has worked, at least when measured against public procurement. Devolution of power to Scotland and Wales has largely been successful, and what looks like a lasting peace has been achieved in Northern Ireland. Crime rates have come down substantially in the UK as a whole, and Britain has made a more fruitful adaptation to increasing cultural diversity than most other European countries.

From a party so often seen as illiberal and authoritarian, there were substantial achievements in the opposite direction. Labour signed up to the EU Social Chapter, together with the European Convention on Human Rights, introduced a Freedom of Information Act and endorsed civil partnerships for same-sex couples. Britain is a more liberal and tolerant society than it was, and Labour's policies played a part in this change. In foreign policy, overseas aid was increased well beyond anything preceding Tory governments had managed.

The military interventions in Bosnia, Kosovo - where Blair played a crucial role in persuading the Americans to contemplate deploying ground forces - and Sierra Leone were widely regarded as successes. If only he had stopped there! Nothing corroded Blair's re­putation more than his ill-starred decision to become George Bush's main partner in the invasion of Iraq.

Other far-reaching mistakes were made. The experiment with spin and media management during Labour's early years in power backfired and helped to create the impression that New Labour was about presentation rather than policy. Blair did not succeed in integrating Britain more closely into the EU, and some of his closest relationships with other European leaders - notably with the Italian premier, Silvio Berlusconi - were puzzling.

It was right to argue that Labour should become more business-friendly, and it was also right to recognise the importance of the City to the British economy. But it was a fundamental error to allow the prawn cocktail offensive to evolve into fawning dependence, with the result that the UK was transformed into a kind of gigantic tax haven. The idea that Labour should be "intensely relaxed about people getting filthy rich" not only exacerbated inequalities, but also helped to create a culture of irresponsibility. Bosses protected themselves from the risks they asked their employees to bear.

I don't accept the simplistic idea that New Labour was just a continuation of Thatcherism. Labour's policies involved extensive government intervention in economic life, although mainly on the supply side. And there was a genuine preoccupation with increasing social justice - a notion alien to Margaret Thatcher, Keith Joseph and their guru Milton Friedman. Yet Blair and Brown should have made it much clearer than they did that recognising the virtues of markets is quite different from prostrating oneself before them. Market fundamentalism should have been more explicitly criticised and its limitations exposed. As for proportional representation and wider constitutional reform - surely Labour should have endorsed these as a matter of principle, not as a result of political expediency?

The other parties have had to respond to the agenda that New Labour set. The Tories now endorse gay rights, accept the necessity of reducing poverty, support the Climate Change and Energy Acts that Labour introduced, and will continue most of the labour-market reforms that were made. In propagating the idea of the "big society", the Conservatives are drawing upon the same communitarian traditions that Tony Blair also endorsed. Naturally, they may retreat from these emphases, but at the moment they look genuine.

The global financial crisis, foreseen by very few, seems to have put an end to the world that helped to shape New Labour. Suddenly, everything has gone into juddering reverse: Keynesianism and government economic intervention are back. No one denies that we should seek to regulate the financial markets that once seemed so omni­potent. A tax on world financial transactions, previously dismissed as unrealistic, is now on the cards. It is, after all, possible to elevate the tax rates of the rich.

Meanwhile, there is talk among all the main parties of a return to an active industrial policy and of a renaissance of manufacturing. Climate change and other environmental risks, which Labour did little to confront until late on, are now at the heart of mainstream political concerns. Planning, for years in the shadows, is once more on the agenda, as are severe public spending cuts - the very opposite of the bold, expanding social investment on which New Labour policy was built. Fiscal prudence has ceded place to huge borrowing and very large accumulated debt.

New Labour as such is dead, and it is time to abandon the term. Yet some of the core social and economic trends to which it was a response still obtain, and significant portions of its policy framework remain relevant. In the future, Labour will still need to attract mainstream, affluent voters, against the background of a changing political culture in which the electronic media play a growing role. While it makes eminent sense to aim to reduce the dominance of the financial sector in the economy and encourage a renaissance in manufacturing, the UK will continue to be a post-industrial economy, with service- and knowledge-based occupations dominant.

Welfare reform will loom as large as ever, even more so when efficient spending will be a priority. The problem of sustaining progressive policies on immigration and multiculturalism without losing voter appeal will remain, as will that of how to reduce citizens' anxieties about crime. So, too, will that of finding an appropriate balance between civil liberties, on the one hand, and protecting the country against the threat posed by international terrorism on the other. Keynes is back in fashion, but there can be no return to Keynesian demand management as practised between 1945 and 1979. The challenge ahead of us is to preserve and enhance the flexibility and creativity that markets engender, while turning these qualities to long-term, socially desirable goals.

Fundamental rethinking is needed and a fresh set of policies has to be created. The key problem for Labour out of power will be to minimise the internal squabbling that afflicts so many parties, especially on the left, following an election defeat. Ideological reconstruction could have a decisive role here. The starting point should be to redefine the role of the public sphere.

“Blairites", it could be said, leaned more towards the market than "Brownites", who were keener on the state. However, the public sphere is distinguishable both from markets and from the state, and can be used as a platform for reconstructing each. Labour can be seen to be groping towards such an insight with its attempts, in the wake of the financial crisis, to reintroduce the idea of mutualism to political debate. These rather primitive efforts should be developed further and applied to the task of constructing a form of responsible capitalism, coupled to a sophisticated approach to issues of sustainability.

Anthony Giddens is a former director of the London School of Economics and a Labour peer.

This article first appeared in the 17 May 2010 issue of the New Statesman, On a tightrope

Show Hide image

Why Jeremy Corbyn is a new leader for the New Times

In an inspired election campaign, he confounded his detractors and showed that he was – more than any other leader – in tune with the times.

There have been two great political turning points in postwar Britain. The first was in 1945 with the election of the Attlee government. Driven by a popular wave of determination that peacetime Britain would look very different from the mass unemployment of the 1930s, and built on the foundations of the solidaristic spirit of the war, the Labour government ushered in full employment, the welfare state (including the NHS) and nationalisation of the basic industries, notably coal and the railways. It was a reforming government the like of which Britain had not previously experienced in the first half of the 20th century. The popular support enjoyed by the reforms was such that the ensuing social-democratic consensus was to last until the end of the 1970s, with Tory as well as Labour governments broadly operating within its framework.

During the 1970s, however, opposition to the social-democratic consensus grew steadily, led by the rise of the radical right, which culminated in 1979 in the election of Margaret Thatcher’s first government. In the process, the Thatcherites redefined the political debate, broadening it beyond the rather institutionalised and truncated forms that it had previously taken: they conducted a highly populist campaign that was for individualism and against collectivism; for the market and against the state; for liberty and against trade unionism; for law and order and against crime.

These ideas were dismissed by the left as just an extreme version of the same old Toryism, entirely failing to recognise their novelty and therefore the kind of threat they posed. The 1979 election, followed by Ronald Reagan’s US victory in 1980, began the neoliberal era, which remained hegemonic in Britain, and more widely in the West, for three decades. Tory and Labour governments alike operated within the terms and by the logic of neoliberalism. The only thing new about New Labour was its acquiescence in neoliberalism; even in this sense, it was not new but derivative of Thatcherism.

The financial crisis of 2007-2008 marked the beginning of the end of neoliberalism. Unlike the social-democratic consensus, which was undermined by the ideological challenge posed by Thatcherism, neoliberalism was brought to its knees not by any ideological alternative – such was the hegemonic sway of neoliberalism – but by the biggest financial crisis since 1931. This was the consequence of the fragility of a financial sector left to its own devices as a result of sweeping deregulation, and the corrupt and extreme practices that this encouraged.

The origin of the crisis lay not in the Labour government – complicit though it was in the neoliberal indulgence of the financial sector – but in the deregulation of the banking sector on both sides of the Atlantic in the 1980s. Neoliberalism limped on in the period after 2007-2008 but as real wages stagnated, recovery proved a mirage, and, with the behaviour of the bankers exposed, a deep disillusionment spread across society. During 2015-16, a populist wave of opposition to the establishment engulfed much of Europe and the United States.

Except at the extremes – Greece perhaps being the most notable example – the left was not a beneficiary: on the contrary it, too, was punished by the people in the same manner as the parties of the mainstream right were. The reason was straightforward enough. The left was tarnished with the same brush as the right: almost everywhere social-democratic parties, albeit to varying degrees, had pursued neoliberal policies. Bill Clinton and Tony Blair became – and presented themselves as – leaders of neoliberalism and as enthusiastic advocates of a strategy of hyper-globalisation, which resulted in growing inequality. In this fundamental respect these parties were more or less ­indistinguishable from the right.

***

The first signs of open revolt against New Labour – the representatives and evangelists of neoliberal ideas in the Labour Party – came in the aftermath of the 2015 ­election and the entirely unpredicted and overwhelming victory of Jeremy Corbyn in the leadership election. Something was happening. Yet much of the left, along with the media, summarily dismissed it as a revival of far-left entryism; that these were for the most part no more than a bunch of Trots. There is a powerful, often overwhelming, tendency to see new phenomena in terms of the past. The new and unfamiliar is much more difficult to understand than the old and familiar: it requires serious intellectual effort and an open and inquiring mind. The left is not alone in this syndrome. The right condemned the 2017 Labour Party manifesto as a replica of Labour’s 1983 manifesto. They couldn’t have been more wrong.

That Corbyn had been a veteran of the far left for so long lent credence to the idea that he was merely a retread of a failed past: there was nothing new about him. In a brilliant election campaign, Corbyn not only gave the lie to this but also demonstrated that he, far more than any of the other party leaders, was in tune with the times, the candidate of modernity.

Crises, great turning points, new conjunctures, new forms of consciousness are by definition incubators of the new. That is one of the great sources of their fascination. We can now see the line of linkage between the thousands of young people who gave Corbyn his overwhelming victory in the leadership election in 2015 and the millions of young people who were enthused by his general election campaign in 2017. It is no accident that it was the young rather than the middle-aged or the seniors who were in the vanguard: the young are the bearers and products of the new, they are the lightning conductors of change. Their elders, by contrast, are steeped in old ways of thinking and doing, having lived through and internalised the values and norms of neoliberalism for more than 30 years.

Yet there is another, rather more important aspect to how we identify the new, namely the way we see politics and how politics is conceived. Electoral politics is a highly institutionalised and tribal activity. There have been, as I argued earlier, two great turning points in postwar politics: the social-democratic era ushered in by the 1945 Labour government and the neoliberal era launched by the Tory government in 1979.

The average Tory MP or activist, no doubt, would interpret history primarily in terms of Tory and Labour governments; Labour MPs and activists would do similarly. But this is a superficial reading of politics based on party labels which ignores the deeper forces that shape different eras, generate crises and result in new paradigms.

Alas, most political journalists and columnists are afflicted with the same inability to distinguish the wood (an understanding of the deeper historical forces at work) from the trees (the day-to-day manoeuvring of parties and politicians). In normal times, this may not be so important, because life continues for the most part as before, but at moments of great paradigmatic change it is absolutely critical.

If the political journalists, and indeed the PLP, had understood the deeper forces and profound changes now at work, they would never have failed en masse to rise above the banal and predictable in their assessment of Corbyn. Something deep, indeed, is happening. A historical era – namely, that of neoliberalism – is in its death throes. All the old assumptions can no longer be assumed. We are in new territory: we haven’t been here before. The smart suits long preferred by New Labour wannabes are no longer a symbol of success and ambition but of alienation from, and rejection of, those who have been left behind; who, from being ignored and dismissed, are in the process of moving to the centre of the political stage.

Corbyn, you may recall, was instantly rejected and ridiculed for his sartorial style, and yet we can now see that, with a little smartening, it conveys an authenticity and affinity with the times that made his style of dress more or less immune from criticism during the general election campaign. Yet fashion is only a way to illustrate a much deeper point.

The end of neoliberalism, once so hegemonic, so commanding, is turning Britain on its head. That is why – extraordinary when you think about it – all the attempts by the right to dismiss Corbyn as a far-left extremist failed miserably, even proved counterproductive, because that was not how people saw him, not how they heard him. He was speaking a language and voicing concerns that a broad cross-section of the public could understand and identify with.

***

The reason a large majority of the PLP was opposed to Corbyn, desperate to be rid of him, was because they were still living in the neoliberal era, still slaves to its ideology, still in thrall to its logic. They knew no other way of thinking or political being. They accused Corbyn of being out of time when in fact it was most of the PLP – not to mention the likes of Mandelson and Blair – who were still imprisoned in an earlier historical era. The end of neoliberalism marks the death of New Labour. In contrast, Corbyn is aligned with the world as it is rather than as it was. What a wonderful irony.

Corbyn’s success in the general election requires us to revisit some of the assumptions that have underpinned much political commentary over the past several years. The turmoil in Labour ranks and the ridiculing of Corbyn persuaded many, including on the left, that Labour stood on the edge of the abyss and that the Tories would continue to dominate for long into the future. With Corbyn having seized the political initiative, the Tories are now cast in a new light. With Labour in the process of burying its New Labour legacy and addressing a very new conjuncture, then the end of neoliberalism poses a much more serious challenge to the Tories than it does the Labour Party.

The Cameron/Osborne leadership was still very much of a neoliberal frame of mind, not least in their emphasis on austerity. It would appear that, in the light of the new popular mood, the government will now be forced to abandon austerity. Theresa May, on taking office, talked about a return to One Nation Toryism and the need to help the worst-off, but that has never moved beyond rhetoric: now she is dead in the water.

Meanwhile, the Tories are in fast retreat over Brexit. They held a referendum over the EU for narrowly party reasons which, from a national point of view, was entirely unnecessary. As a result of the Brexit vote, the Cameron leadership was forced to resign and the Brexiteers took de facto command. But now, after the election, the Tories are in headlong retreat from anything like a “hard Brexit”. In short, they have utterly lost control of the political agenda and are being driven by events. Above all, they are frightened of another election from which Corbyn is likely to emerge as leader with a political agenda that will owe nothing to neoliberalism.

Apart from Corbyn’s extraordinary emergence as a leader who understands – and is entirely comfortable with – the imperatives of the new conjuncture and the need for a new political paradigm, the key to Labour’s transformed position in the eyes of the public was its 2017 manifesto, arguably its best and most important since 1945. You may recall that for three decades the dominant themes were marketisation, privatisation, trickle-down economics, the wastefulness and inefficiencies of the state, the incontrovertible case for hyper-globalisation, and bankers and financiers as the New Gods.

Labour’s manifesto offered a very different vision: a fairer society, bearing down on inequality, a more redistributive tax system, the centrality of the social, proper funding of public services, nationalisation of the railways and water industry, and people as the priority rather than business and the City. The title captured the spirit – For the Many Not the Few. Or, to put in another way, After Neoliberalism. The vision is not yet the answer to the latter question, but it represents the beginnings of an answer.

Ever since the late 1970s, Labour has been on the defensive, struggling to deal with a world where the right has been hegemonic. We can now begin to glimpse a different possibility, one in which the left can begin to take ownership – at least in some degree – of a new, post-neoliberal political settlement. But we should not underestimate the enormous problems that lie in wait. The relative economic prospects for the country are far worse than they have been at any time since 1945. As we saw in the Brexit vote, the forces of conservatism, nativism, racism and imperial nostalgia remain hugely powerful. Not only has the country rejected continued membership of the European Union, but, along with the rest of the West, it is far from reconciled with the new world that is in the process of being created before our very eyes, in which the developing world will be paramount and in which China will be the global leader.

Nonetheless, to be able to entertain a sense of optimism about our own country is a novel experience after 30 years of being out in the cold. No wonder so many are feeling energised again.

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

Martin Jacques is the former editor of Marxism Today. 

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

0800 7318496