New Labour’s Legacy

On the morning of Labour’s greatest electoral triumph, 1st May 1997, Tony Blair famously declared that a new dawn had broken. With an air of expectancy and a thumping majority, Labour could finally achieve Harold Wilson’s goal of becoming the natural party of government. Yet twenty years later, Labour heads into an election staring at what could be its heaviest defeat since 1935, despite having already spent seven years in opposition. How did it come to this?

New Labour enjoyed undoubted achievements. The minimum wage, low unemployment, well-funded public services, and the Good Friday Agreement in Northern Ireland to name a few. But these accomplishments tend to be overlooked in the light of the other legacies of the governments led by Blair and Gordon Brown, which have dogged it since it left office. For the left, those legacies were the Iraq War and the marketisation of public services. Iraq turned Blair into a toxic figure. His alliance with a right-wing US president in pursuit of what some regard as the worst foreign-policy disaster since Suez destroyed his reputation and continues to fix perceptions of him. He was never forgiven by the Labour left or the liberal commentariat.

Meanwhile, Labour’s affiliated unions resented Blair’s reforms of public services, which they saw as an attack on their prerogatives. The rise of a generation of left-wing union leaders denouncing “privatisation”—however loosely defined—was another of Blair’s legacies.

It was this alliance of the left and the unions that propelled Ed Miliband to the Labour leadership in 2010. In disavowing New Labour but having nothing to put in its place, Miliband was merely promising his party a better yesterday. However, his victory set Labour on a left-wing path that would lead eventually, if unexpectedly, to Jeremy Corbyn. The rise of the Labour left was an internal reaction to New Labour, which many left-wingers regarded as an alien creed. The Blair era suggests there is an ideological point beyond which a centre-left party cannot travel without endangering its social-democratic identity among its supporters.

While the left’s critique of New Labour was internally influential, a rival assessment from the right chimed with many voters. The right views New Labour’s legacy as boom-and-bust, a public-sector client state, and mass immigration. Labour has not recovered the reputation for economic competence it lost after the financial crash of 2008. While it was a global crisis, Blair and Brown allowed the budget deficit to rise during the boom years, a consequence of generous spending on public services—which voters welcomed—while being reluctant to increase taxes, which they wouldn’t have welcomed. The solution was extra borrowing but while that looked clever at the time, the subsequent recession and austerity ensured that Labour continues to pay a heavy political price.

Labour is also indelibly linked with immigration. Blair allowed citizens of eight Eastern European states full work rights in Britain on their countries’ accession to the EU in 2004, unlike most existing EU states, which imposed transitional controls. This decision not only inflicted electoral damage on Labour; it was a major factor in the victory for “Leave” in the EU referendum of 2016. What was perhaps Britain’s most pro-European government paved the way for Brexit.

Issues such as immigration and the EU were part of the disconnect between Labour and its working-class supporters, which started under Blair and has continued ever since. Support for Labour between 1997 and 2010 decreased gently among professional-managerial AB voters from 31 per cent to 26 per cent, slightly more strongly among lower-middle-class C1s from 37 per cent to 28 per cent, but much more steeply among skilled manual workers (C2s) from 50 per cent to 29 per cent and semi-/unskilled workers (DEs) from 59 per cent to 40 per cent. While there were many reasons for these decreases, the ABC1s were much more comfortable than C2DEs were with New Labour’s pro-EU perspective and its pro-immigration and diversity agenda. These identity issues are becoming increasingly important, as evident in the debate over Englishness, itself partly a reaction to New Labour’s programme of Celtic devolution and the rise of Scottish nationalism.

It has become commonplace after Brexit to talk about the unravelling of Labour’s electoral coalition of working-class voters in smaller towns in the North and Midlands, on the one hand, and middle-class voters, students and ethnic minorities in metropolitan areas on the other. But while we now think of this as a Leave-Remain fissure, it has been there since the Blair years. Blairites and Corbynistas are both tribes of Islington that are rooted more in the second of these groups than in the first. Neither faction has explained how Labour can reassemble its electoral coalition.

It is a problem that confronts social-democratic parties throughout Europe. On that score, the New Labour project must be considered a failure because it explicitly sought to update social democracy, pursuing fairness and social inclusion within the framework of globalisation and market forces. But it forgot the importance of identity, patriotism and sovereignty for many ordinary people, ceding these issues to the right—including UKIP, which has targeted disaffected Labour voters. Today, Labour politicians feel more at ease talking about single-market access than border control.

Blair failed to reshape the political agenda to the extent that Margaret Thatcher did. She converted her party to the free market and compelled Labour to follow suit. Perhaps New Labour’s strongest positive long-term effect was on public services. In 1997, the NHS was severely underfunded but by 2010, spending on it had doubled in real terms in response to public demands for improvements. Even David Cameron felt obliged to ring-fence NHS spending, and despite perennial funding crises, spending remains roughly where it was in 2010, at 7.5 per cent of GDP.

New Labour was a product of its era, but times have changed and there can be no going back. Britain will not be at the heart of Europe. Globalisation is viewed with suspicion. Labour’s Scottish heartlands have gone. If there is a legacy of 1997 for today’s moderates, it is that victory is built on recognising how the country has changed and what needs to be done to appeal to a cross-class constituency of support. That could mean accepting, perhaps even embracing, Brexit. It will also mean overcoming a squeamish attitude to debates over Englishness. But none of that will matter unless there is a broad recognition among all wings of the party of one of the core truths of New Labour: that strong leadership and a reputation for economic competence are essential if a party is to be granted a hearing from voters. Without that, there will be no new dawn.