Describing New Labour As A 'Warmed Up' Version Of Thatcherism

Describing New Labour as a ‘warmed up’ version of Thatcherism is a paradoxical statement in that it contains both a great deal of truth and falsehood. It is certainly true that New Labour accepted, and in some cases developed, Thatcherite ideals - namely deregulation of the economy, privatisation and limiting the powers of trade unions. It is also true that the New Labour style of government was deeply Thatcher-esk in its reliance on big business/media support, continuing the ‘presidential’ system of ruling and doing little to reverse the centralisation of power that occurred under the Tories. To the statements merit it acknowledges evidence to the contrary by describing the Labour governments of 1997-2010 as ‘warmed up Thatcherism’ (as opposed
to just Thatcherism) - presumably referring to the differences in policy and themes between the two (and at the characterising them as mild and circumstantial). On the other hand, in describing New Labour as ‘nothing more than warmed up Thatcherism’ the statement fails to acknowledge that this rightward shift in UK politics was part of a global neoliberal alignment, the roots of which occurred long before Margaret Thatcher occupied Number 10. New Labour was a product of the so called ‘Third Way’, and all across the world parties previously seen as centre-left found themselves following a similar pattern to New Labour in order to win power: challenging the idea that N.L was nothing more than an offshoot of Margaret Thatcher. Nevertheless, the assertion the statement makes is a thought provoking one, which challenges mainstream understanding of the Blair/Brown years as a centrist development, and is an excellent topic for an essay.

Thatcherism is a disputed term, and its definition is worthy of an essay in itself. In short, however, it refers largely to the blend of monetarist, neoliberal economic policy and traditional Toryism followed by Margaret Thatcher, and the way in which she led the country. Given that it is usually used in the context of economics, we will begin to answer this essays question by examining New Labour’s economic record when juxtaposed with Thatcher’s. In a rather telling 2013 interview with CNN on the topic of the then recently deceased Margaret Thatcher, Tony Blair said the following:

[explaining with what he agrees with M.T on] ... In other things like how British industry became more competitive, you know, privatising the state industries and putting trade unions within a proper legal framework. Those things are with us still today and I think they wouldn’t be here today if they hadn’t, in the end, reached a certain stability and consensus.

This brief explanation is remarkable in how loaded the language is; praising Thatcher for creating a more ‘competitive’ industry could be mistaken for something written by Milton Friedman [the intellectual father of monetarism].
In describing Thatcher’s economic record as making British industry ‘more competitive’ he makes an important distinction; New Labour accepted the neoliberal economic measure of success, GDP growth⍖, largely abandoning the traditional democratic socialist view of economic success – growing equality. The United Kingdom’s GDP rose every quarter during Blair’s term in office; inequality measured by the Gini coefficient rose during Blair’s tenure as PM and hit it’s peak just a few months into Gordon Brown’s premiership. Such an economic legacy is typical of a neo-liberal/Thatcherite government during boom years (it parallels Ronald Reagan’s record in the 1980s). Furthermore, New Labour did nothing to reverse the sweeping privatisations that occurred from ‘79-97, even completing the selling of the railways, making them Thatcherite in their inaction if nothing else. It was Thatcher who deregulated the London Stock Exchange in 1986, the so called Big Bang, and under New Labour only a limited regulatory body [Financial Service Authority] was introduced - later described by Gordon Brown as a ‘big mistake’ for its ineffectiveness. Both M.T and Blair/Brown sought market based reforms, shying away from public spending wherever possible - even when New Labour followed through on traditional Labour policy, such as the injection of funds into the NHS. This was mainly done with the Conservative/Thatcherite toolkit, namely the PFI [Private Finance Initiative], a product of John Major’s spell in Number 10; during the New Labour period the PFI accounted for a staggering 75% of the funds for new hospitals. Much in the way that Clement Attlee’s government of ‘45-51 set the economic fundamentals for the Conservative governments to follow, by describing Thatcher’s
record on industry as reaching a ‘consensus’, Blair is admitting that the basis of New Labour’s economic policy had been set by the 18 years of Tory government that preceded him: strong evidence in favour of the question’s statement. This is a sentiment shared by Tony Benn, who described New Labour as having a ‘commitment to the economic policies of the Thatcherite Conservatives’. Given all this, it is perfectly legitimate to characterise the New Labour period as well to the right economically of any of the Conservative governments between Attlee and Thatcher.

Many supporters of New Labour and the Third Way would read the above assessment of the N.L economic period and point out that I have failed to mention the cases where New Labour strayed from neoliberal economics. After all, it was New Labour that introduced the Office of Rail and Road (a regulatory body for the then recently privatised railways), the minimum wage, raised taxes, brought in tax credits, oversaw an increase in child benefits and introduced new parental rights in the workplace - all of which contradict Thatcherite ideology. However, this is not evidence against the statement in the question as such reforms were minor compared to those that were kept in place/ furthered under New Labour - as referenced in the previous paragraph these reforms didn’t stop wealth inequality from hitting its highest ever point in modern British history (since surpassed by the Coalition/Conservative government). These actions then can be seen as the ‘warmed up’ part of the questions statement, and certainly appear so when you consider that New Labour were returned to parliament three times, twice with near triple digit majorities, and inherited an economy that was and continued to experience the longest period of sustained growth in modern British history. When compared to Clement Attlee’s government of 1945-51, which inherited a crippled economy that had lost a quarter of all wealth to the war effort and still managed to create the NHS and forge a Keynesian consensus that would last 34 years, New Labour’s achievements pale into insignificance. Perhaps the finest explanation for rationalising New Labour’s centre-left reforms and their broadly neoliberal economic policy was penned by Stuart Hall; his theory was that within New Labour there were two strands, the dominant neoliberal side and the subordinate democratic socialist faction - this, in many ways, is a far more nuanced way of calling New Labour ‘warmed up Thatcherism’. Indeed, just as New Labour represented a breakaway from traditional Labour ideas so too did Thatcher for the Conservative Party and One Nation conservatism, and the model of a dominant neoliberal strand and a subordinate One Nation Tory side, or ‘wets’ as Thatcher saw them, is also helpful in understanding Thatcherism - the similarities between the two political movements are striking.

Margaret Thatcher is not considered the most successful post war Prime Minister just because she ushered in a new era of economics - it was her style of governance that secured her reputation as much as anything. It is certainly true that the public image fostered by M.T and T.B were worlds apart (as alluded to in this essay's introduction), but in the style of governance, in how Thatcher and Blair/Brown achieved their aims, there are striking similarities. Thatcher’s perceived departure from the cabinet system led many commentators at the time and since to declare her Britain’s first president; Blair too came under fire for taking a presidential approach, being criticised by Sir George Young for reducing the House of Commons to a ‘talking shop’. What then is meant by a presidential style? Both Thatcher and Blair alienated their cabinets by seeking counsel elsewhere - Nigel Lawson resigned as Chancellor in a fury over Thatcher’s reliance on Sir Alan Walters for economic advice (in addition to policy differences).