The Labour Party - key foundations & the controversy over Clause 4

The Labour Party

When it was founded (1900), its correct name was the Labour Representation Committee. It was founded by a group of moderate trade unions to get working men into parliament. It was an adjunct of the Liberal Party between 1906 and 1921, after which there was a transformation of British politics, where labour replaced Liberals as the main opposition. In 1918 the Labour Party’s constitution was written by Sidney Webb. Clause 4 gives a definition of the Labour Party’s version of socialism. The old Clause 4 says: “The Labour Party’s object is… to secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of common ownership of the means of production, distribution and exchange…” this is a commitment to redistributive taxation and nationalisation of major industries (1918 – 1995). Herbert Morrison said, “Socialism is what the Labour Party does.”

Labour had 2 governments in the inter-war period; 1924 (8 months) and 1929 – 1931. the PM was Ramsey MacDonald (the first Labour PM). 1945 – 1951 was the first majority Labour government under Clement Attlee. That government:

created the welfare state
nationalised coal, railways, electricity, gas etc.
had the number 1 policy of the pursuit of full employment.

2 failed Labour governments

1964 – 1970 Harold Wilson. Failed due to economic mismanagement:

Inflation
Poor industrial relations
1967- forced to devalue Sterling

1974 – 1979 Harold Wilson and James Callaghan. Also failed due to ...

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created the welfare state
nationalised coal, railways, electricity, gas etc.
had the number 1 policy of the pursuit of full employment.

2 failed Labour governments

1964 – 1970 Harold Wilson. Failed due to economic mismanagement:

Inflation
Poor industrial relations
1967- forced to devalue Sterling

1974 – 1979 Harold Wilson and James Callaghan. Also failed due to economic problems:

‘Stagflation’ (stagnation + inflation)
1976- Dennis Healey (Chancellor of the Exchequer) had to get an IMF loan.
‘The Winter of Discontent’ (public sector strikes, winter 1978)

By 1979, Labour’s interpretation of socialism was failing.

Labour in opposition 1979 – 1994

In 1979 James Callaghan resigned and Michael Foot became Labour’s new leader until 1983. The party became so left wing in this period they were unelectable. Labour’s 1983 manifesto was described as ‘The longest suicide note in history.’ Policies included:

Unilateral (just British) nuclear disarmament
Withdrawal from the EU
Rationalising privatised industries
Raising taxes

Labour only got 27.6% of the vote, their worst result since 1935. Foot resigned in 1983 after the election. Neil Kinnock succeeded Foot as Labour leader until 1992. He began the process of modernising the Labour Party:

He purged the party of left wing extremists (particularly Militant Tendency- a group of entryists who joined with the intent of taking over). Militant Tendency for control in Liverpool, Lambeth and Haringey. The Daily Mail dubbed them the ‘Loony Left’. In 1986 Kinnock convinced the National Executive Committee to expel over 200 members of MT.
After the 1987 defeat, Kinnock launched a policy review to get rid of unpopular policies. They got rid of unilateral nuclear disarmament, withdrawal from the EU and rationalising privatised industries.
Kinnock started the process of reducing the influence of the trade unions, eg. selection of candidates changed from decision of local trade unions to the ‘One Member One Vote’ system (from 1988 onwards), where local party members decide.

In 1992 Labour had had some expectation that it would achieve a narrow victory. They had a victory party (premature triumphalism). As a result of their defeat, Kinnock resigned. He was succeeded by John Smith, who was a Christian socialist and a traditional Labour leader.