The term ‘New Labour’ describes the economic policies devised by the UK Labour Party in the late 1980s and early 1990s to ensure a departure from traditional Labour economic policies. The name originates and was coined from a conference slogan in 1994. The slogan was later seen in a draft manifesto published in 1996 and branded as ‘New Labour, New Life for Britain’. When Blair became Prime Minister in 1997, his approach was to revise the decline of social democracy. New Labour sought to envisage a new conception of social democracy. According to Giddens (2010) ‘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’. These policy changes included a promotion of globalisation, the development of policies that supported the newly post-industrial/ knowledge based economy, the abandonment of clause four and a reduced role of the state.
In order to understand what was new about new Labour, it is crucial to evaluate the historical context which determined it and evaluate old labour’s reasoning for change. During the 1960s and 1970s, the main British political parties had sought to reverse Britain’s economic decline. Britain was often described as ‘the sick man of Europe’ due to its lacklustre economic growth. According to the Kavanagh (2001:306) ‘the targets for blame included: failure to invest in new plant and machinery; restrictive working practices and outdated attitudes on the shop floor ('us and them'); amateurish management; loss of markets; and rise of competition.’ Old Labour’s promise to the working class wasn’t reflected in their electoral success. In the 1979 Conservative election broadcast, Labour was publically accused of placing too much taxation upon the people. With the rise of Thatcherism, the issue of full employment was replaced by the issue of inflation. The heavy general election defeats gradually convinced old Labour to accept much of the new settlement and the successes of Thatcher’s policies at the 1983 general election. Notably, new Labour had adhered to Thatcher’s success and understood the need for the prioritisation of economic stability, the encouragement of private enterprise and the effectiveness of pragmatic politics.
Heavily mass production based economy along with a unionised orientated workforce was becoming obsolete. ‘New Labour’s policies transcended from Fordist economics to coincide with the new Post Fordist society. For Labour, the impact of privatisation and the decline of nationalised industries along with the declining influence of Keynesian economics revolutionised a new consensus on the roles of the government. The previous Conservative governments had reenlisted the role of the state as an enabler rather than a provider. When Labour succeeded the Conservatives, they prolonged this outlook of the role of the state as an enabler rather than a provider in order to the focus on individualism and use pragmatism to appeal to the electorate and seemingly, the new and rising middle class. Labour’s main aspirations were to sustain full employment by taxation, promote public expenditure and government borrowing to deliver full employment. The previous link between social democracy and the nation state had been demolished. Policies such as cheap privatisation shares, trade union reforms, and the curtailment of direct taxes were significantly popular amongst new Labour policies.
Globalisation remains a buzz word to define the politics of new Labour. According to Bauman (1998) ‘Globalisation is not a process taking place somewhere far away in some exotic place. Globalisation is taking place in Leeds as well…