Twenty-five years on, it's clearer than ever that New Labour failed

New Labour was a formidable political project—but it never won real power

April 28, 2022
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Photo: Emmett Rill / Alamy Stock Photo

We stood and made small talk as best we could, our minds a mix of end-of-campaign exhaustion and whirling excitement over what might now be. We were the lucky ones who had tickets to the Royal Festival Hall that balmy early May night a quarter of a century ago. With exquisite PR timing, Tony Blair appeared as the sun was rising over the Thames and inquired to a waiting and excited nation: “A new dawn has broken, has it not?” Well, yes Tony, and no.

Twenty-five years on, New Labour still matters. It matters because it tells us much about political projects, why they work and why they fail. And right now, what happened back then shines a harsh reflected light on what’s happening with Labour today.

New Labour and Blair are the marmite of contemporary British politics. It seems you love or loathe them. But in truth it is nearly always more complex. Ultimately, my view is that New Labour failed on its own terms of building a new Britain. But that doesn’t mean it didn’t do good things and that we can’t learn anything from it. So, what happened back then, and what is relevant now?

To understand, we need to go back to the time before New Labour. Like every political project, New Labour was a child of its time. And what shaped New Labour’s birth more than anything was a context of weakness and failure. 

New Labour was a clever defensive move in the face of hostile tectonic structural shifts: from Keynesianism to free markets, from the nation state to the global economy, from the working class to individualised consumers, from muscular unions to rampant corporate power, and from the Cold War to American domination. 

Everything that made Labour strong at its high-water mark of 1945 had gone. New Labour was a bold attempt to end the retreat, but without addressing the party’s structural weaknesses.

Those weaknesses, that New Labour inherited, had inevitably led to electoral failure—four in a row from 1979. The party spent 18 long years in the wilderness. The last loss, in 1992, was the solar plexus blow. Margaret Thatcher had gone, but even then, Labour couldn’t beat the hapless John Major. Neil Kinnock had taken new old Labour as far as it could go. It was time for something very different. Enter Tony Blair.

Blair had been part of the Neil Kinnock, John Smith, Gordon Brown and Peter Mandelson efforts to make Labour electable again since the near-death experience of the 1983 election, when the SDP nearly pipped the party in terms of national share of the vote. But he was not “of them.” The others were schooled in the ways of the Labour tribe and paid respect to its history and traditions. Blair had little time for any of this sentiment. For good or ill, he was a breath of fresh air, beating a new path as he moved through the opposition shadows at Trade and then the Home Office.

Although the project was also driven by women like Mo Mowlam and Clare Short, New Labour was largely politics for and by the boys, and all the worse for it. 

By the time of John Smith’s untimely death in 1994, Blair had become immensely frustrated with the caution and conservatism of a “one more heave” approach. On internal party issues, such as one member one vote as the method of electing party leaders, he wanted the real thing, not some grubby fudge with the unions still involved. At a party conference fringe in 1993 on modernisation, at which he spoke, I was one of just half a dozen in the audience. He was out on a lonely limb. 

A year later he was party leader in total control, able to brush Brown aside for the crown because he had a better sense of the moment: the desperate desire in the party to win and in the country for change.

New Labour had verve and swagger. It behaved with confidence and boldness as it ripped up Clause 4’s commitment to nationalisation and in effect changed the party name from Labour to New Labour. But beneath the surface it was a nervous and insecure project. It knew the working class had long since stopped its forward march and that neoliberalism was ascendant. The task wasn’t to build a now seemingly impossibly social democratic nirvana, but paper over the cracks between old Labour values of solidarity and equity and the harsh reality of a capitalism now unbound. The main purpose was neither socialism nor social democracy, but to win, at almost all costs. And so the most elaborate system of spin and top-down control had to be erected to disguise the gap between Labour’s historic mission and this new realism.

The Marxist cultural theorist Stuart Hall described New Labour best as a “double shuffle.” For Hall, New Labour took two neoliberal steps forward, and then a social democratic step back. It was a contradictory and confusing project. It looked two ways, feinting left when it was safe to do so but predominantly aligning itself to the forces of market fundamentalism. It would redistribute, but only by stealth so not to raise the ire of the right-wing press or the bond markets. 

Its method was to top skim the spoils of a financialised economy to invest in nominally social projects. But so total was the neoliberal victory that even these had to be bent to the market. Social security was turned effectively into workfare, as a strivers-versus-scroungers frame was actively embraced. Education, education, education wasn’t about the intrinsic value of critical thinking and citizenship, but a supply-side investment in a global race for talent in which you either sank or swam. State intervention wasn’t for the impossible dream of greater equality, but to help people succeed primarily as consumers in a market economy.

In the comfort of hindsight, it was a sugar rush politics that lasted as long as the taps of the Treasury could be kept on. But it never won the moral case for greater equality because it never made it. It never built forces to counter those of neoliberalism because it never tried to. Ultimately, whether it believed the deeper transformation to really make a New Britain was undesirable or unfeasible didn’t matter; the result was the same. 

Meanwhile, the obsession with winners meant being aligned with winners. And it didn’t matter that those were Rupert Murdoch, or later George Bush, as Blair signed the nation up to the ultimate hubris of remaking the Middle East in the mould of the Washington consensus. The Iraq War broke the moral soul of Labour and corroded people’s belief in politics and democracy, helping pave the way for the rampant populism of today. Boris Johnson’s “Partygate” scandal is a disgrace but it has nothing on the degradation of democracy that was the Iraq War. 

If all this seems harsh, it isn’t meant to be. It’s meant to be a realistic appraisal of what happened a quarter of a century ago, and why. Indeed, I did and still do have respect for much of New Labour. I was an early and enthusiastic cog in its wheels. Labour had to change to win and govern. In its early incarnation the project held out the promise of more. It embraced communitarianism and momentarily grasped Will Hutton’s “stakeholder capitalism” agenda. It understood the importance of ideas, culture and new institutions such as think tanks like Demos, and it welcomed some degree of pluralism and debate. It had a phalanx of top-rate intellectuals to guide it, from Anthony Giddens to Julian le Grand. And it did much that was good. But it did so in the relatively benign circumstances of 60 consecutive quarters of economic growth where distributional conflicts were light. Along the way, it bought the “end of history” line and assumed a world in which class antagonisms between labour and capital had been banished. 

They say, “judge a person by their successor.” New Labour was succeeded by years of austerity, Brexit and now Johnsonian populism. The seeds of much of this rightward shift were sown in the New Labour years. Most of what it put in place just crumbled. Child poverty now soars, Sure Start is no more, the Good Friday agreement is under threat and its Scottish parliament is busy hatching plans to break up the Union.

In a state of fundamental weakness, without a class agent, a national political economic model in this shape of Keynesianism or a system of Fordist governance—which had  given way to market fundamentalism—was this all New Labour could do? It had huge majorities and off the Richter scale public backing, at least in the early years. But power is a commodity to be spent, not hoarded. It inevitably trickles away over time. New Labour could have faced its structural weaknesses and made at least a start at addressing them, rather than endlessly accommodating itself with neoliberal forces that would never be fully satisfied by anything other than a mirror image of themselves.

It could have invested in alternative media to wean itself and the nation off Murdoch. It could have helped resource the unions to grow again and rebalance the dominance of corporate power. It could have democratised, rather than commercialised, some of the public sector. It could have given back real power and money to councils. It could have grown the Labour Party to become a force for good in communities and not just a leader’s fan club. It needn’t have been so naive about the dangerous excesses of the City of London. It could have reached out to other social democratic parties to build a social Europe, instead of arrogantly accusing them of being sclerotic in their failure to modernise as it had. It could have built cross-party alliances and introduced proportional representation as its 1997 manifesto promised. But it didn’t. Other futures were possible. They always are.

New Labour came into being at a moment of historic weakness for the left. But it believed its own hype, that it won as New Labour and would govern as New Labour. In reality, it won largely because the Tories, tired and directionless, lost. It was really never new enough nor Labour enough. It never embraced the modernity of an age being made flatter by technology, nor did it deliver on the promise of equality and solidarity in ways fitting a party genuinely of labour.

There are two final reflections on this by-gone age that matter now. The first is that despite these inherited structural weaknesses, New Labour was still a formidable political project, at least in terms of what has come since. It thought and acted in big ways. And it won elections—a necessary but insufficient step to political transformation. It won office, but never real power. 

And so, it largely failed and then failed to learn why. But because they were such towering political figures then, Blair and Brown still dominate much of Labour’s discourse today, despite having little to say now that is new or relevant. It’s as if the crash of 2008 had never happened, the climate crisis wasn’t here, and we can pick up where it all left off, just as long as the “grown-ups” are back. 

In contrast, Labour under Keir Starmer feels like a sixth-form play of that dynamic, creative but ultimately disappointing era. The 1997 model offers some pointers about how elections can be won, but little, if anything, for today’s perma-crisis world. If a project with some depth and real talent couldn’t permanently or substantially reshape the calm waters of the millennium period, what hope of a pale imitation now given the climate, tech and geo-political challenges ahead?

And this is the final reflection: New Labour lived and breathed in age of rampant free markets. Today, capital still rules but it is diminished and defensive. The 2008 crash and its reliance on the state to bail it out forever killed the moral superiority of neoliberalism. Meanwhile, austerity, the cost-of-living crisis and impending climate chaos presage a new era of conflict in which more radical democratic and social ideas need to take root or authoritarian populist ones will. Labour today, including the once-again dominant remnants of New Labour, has turned its back on this new very different reality. The baby of Corbynism has been thrown out with its murky bathwater. A heavy price will be paid.

New Labour tried running up the down escalator of neoliberalism. They were at best naive about a project designed not just to privilege capital over labour, but to extinguish even the thought of mild social democracy. In so doing, it chose a path that was always doomed to fail. 

For Labour to be successfully modernised now would stretch the party to breaking point. A politics that is deeply green, democratic and egalitarian feels far out of the “Labourist” frame of growth, tribalism and economic orthodoxy. But both Blair and Corbyn, in their different ways, show Labour can dramatically change. Maybe another new dawn can still come?