During its years out of power, the Labour Party had undergone a gradual transformation as it attempted to distance itself from the power of the unions on the one hand and the power of the membership on the other, in the guise of the traditional role of the Labour Party Conference. This process had been started before 1992 by Neil Kinnock, who led the party from 1983 to 1992, and it was continued by his successors, first John Smith and then Blair. The need for fundamental reappraisal had been urged as early as 1981, with the founding of the Social Democratic Party, when prominent Labour Party politicians, led by Roy Jenkins, seceded from the party in an attempt to “break the mould” of British politics. Divisions not only between the right and left in the party but also within the left of the party itself added to the chaos that was the British left in the 1980s; the insistence of the radical leftist and former Labour minister Tony Benn on running against the former Labour chancellor Denis Healey in the party election for deputy leadership in 1981 effectively split the radical democratic left and disabled the possibility of an early riposte to Thatcher. It also, ironically enough, contributed to what became known as “New Labour,” rather than a more left-wing variant of labourism eventually replacing the Conservatives.
Tony Blair, 2005.© Crown copyright/Andy Paradise
New Labour, the repeal of Clause IV, and the “third way”
The understanding that the party would have to rethink the market (not only in economic but in social terms), embracing it in a way foreign to many of the unions and the traditional Labour left, grew increasingly after 1992, until, after the Labour victory of 1997, there was a clearly marked path for New Labour. The most symbolically important marker of the change from old to New Labour was the repeal of the party’s Clause IV, engineered by Blair in 1995. The replacement of old Clause IV, which had committed the party to the “common ownership of the means of production,” ended almost 80 years of dedication to that goal. The new path of the party was to be a middle one, in the phraseology of New Labour, a “third way,” supposedly embracing both social justice and the market.
Not only in rhetoric but in reality, New Labour was to be different from the old. There was also to be increasing attention to the importance of the media, an attention that the Tories had developed into something of a fine art under Thatcher, with her press secretary Bernard Ingham. Given the increasing role of the media in the presentation of politics and indeed the almost wholesale integration of political substance and political style through the media, this mastery of the art of “spin” was to become a political necessity. Therefore, art for art’s sake (spin for spin’s sake) was to become a feature of Labour government after 1997. This approach was ultimately to rebound upon the party and, indeed, upon the political process in general during the next decade with the emergence of widespread disillusionment with politics in British society, especially among young people. Navigating the European monetary system and the EU Social Chapter
Labour’s landslide victory in 1997, which undoubtedly benefited from the inspirational leadership Blair seemed to offer, nevertheless may have been less the result of an unbounded belief in New Labour than of the discrediting of the Conservative Party. It is certain that Blair was helped into power by the parlous state into which the Conservative Party had fallen under Major after 1992. Promising that “we ran for office as New Labour, and we shall govern as New Labour,” the Blair government in fact began in a rather conservative fashion, by accepting existing government spending limitations. Nonetheless, the difficult and what came to be the increasingly troubled task of combining aspects of Thatcherism with the idea of a “social market” gathered momentum. Certainly, through much of Blair’s tenure a buoyant economy, well managed by Chancellor of the Exchequer Gordon Brown, did a great deal to ease the passage of New Labour and the third way. In his first major initiative and one of his boldest moves, Blair, abetted by Brown, granted the Bank of England the power to determine interest rate policy without government consultation. This was a major move in the disengagement of financial markets from the state.
Blair’s government was also more and more taken up with the question of whether Britain should stay in or remain outside the European monetary union. At stake were fundamental ideas about British sovereignty and whether, in a progressively globalized world in which some claimed that the individual nation-state was becoming unviable, sovereignty in its existing forms could remain intact. For the Conservative Party, ever more hostile to the EU, this question was central to its attempts to fight back against the Labour Party. Blair’s government did sign the Treaty on European Union’s Social Chapter—which sought to harmonize European social policies on issues such as working conditions, equality in the workplace, and worker health and safety—despite Major’s earlier negotiation of an “opt out” mechanism to placate the treaty’s Conservative opponents. However, the Labour Party’s implementation of the Social Chapter was at best halfhearted, and its goal became to influence as much as possible the EU itself to moderate the operations of the chapter. As with financial deregulation, the emphasis in labour affairs was on the market. The Good Friday Agreement
Conspicuous progress was also made in solving the problem of Northern Ireland. Under Major, in 1994, the IRA declared a cease-fire, the Protestant paramilitaries followed suit soon after, and talks between the British government, the Irish government, and Sinn Féin began. The IRA cease-fire secured a long and involved series of negotiations, in which the Good Friday Agreement (Belfast Agreement) of 1998 seemed to have at last brought peace to Northern Ireland. Unionist suspicion and concern about fundamental reforms to the traditional power structure of the province meant, however, that the implementation of the agreement became a tortuous business. Indeed, it took almost another decade to arrive at what looked like a final resolution, when in 2007 the Northern Ireland Assembly was restored on the basis of power sharing between what had erstwhile been bitter enemies, Sinn Féin and the Ian Paisley-led Democratic Unionist Party. London’s local government, House of Lords reform, and devolution for Scotland and Wales
In May 1998 voters in London overwhelmingly approved the government’s plan for a new assembly for the city and for its first directly elected mayor, resulting in the capital’s first citywide government since the abolition of the Greater London Council by Thatcher in 1986. However, the precedent of an elected mayor in London was not subsequently followed by similar action in other major British cities.
In the late 1990s the Labour government also carried out several other constitutional reforms. The House of Lords, previously dominated by hereditary peers (nobles), was reconstituted as an assembly composed primarily of appointive life peers, with only limited representation of hereditary peers. Nonetheless, the striking contradiction of an unelected legislative assembly in a country that prided itself on its traditions of liberal democracy was apparent.