The first major change to the traditional Labour philosophy was the removal of Clause Four of the Party’s constitution, which put in writing Old Labour’s beliefs on common ownership of industry and public services, and replacing in with a new clause which mentions nothing of ownership of industry at all and merely puts forward the idea of a nation living ‘together, freely, in a spirit of solidarity, tolerance and respect.’ The removal of Clause Four meant that New Labour could break the traditional rules on a commitment to public ownership without technically going against the party constitution. Thus, New Labour has moved focus away from public ownership and towards the merits of continued private ownership and public-private partnerships. In 1998 New Labour made the decision to sell shares in air traffic control and the Royal Mint, among others. Although the Government denied a policy of privatisation because it had retained 49% of the shares for these companies, such a policy would have been unthinkable under Old Labour, and it demonstrated the marked change in thinking shown in the new Clause Four.
Old Labour traditionally stood for equality throughout classes – in particular the working classes - mainly by the redistribution of wealth from upper to lower, and ultimately creating a classless society. Despite the continuation of acceptance on the importance of a less class-controlled society, New Labour has moved the focus away from equality and more on opportunities for everyone – a society where classes still exist, but the poorest are generally better off and have the same opportunities as those at the top.
Under Old Labour, the trade unions played a key role in both party and economy, particularly as a large percentage of party funding came from trade unionists. New Labour has reduced the amount of influence that trade unions have in the party, focussing more on good relations with business to encourage economic growth. It now receives much of its funding from businesses and individuals, and has reduced the weight of the trade union vote by reducing its funding – in 1985 77% of Labour party funding came from trade unions; in 1997 the figure had dropped to 46%.
Another difference between Old and New Labour has been their policies on reform. Old Labour was only slightly interested in constitution reform, preferring to work to improve society within its existing framework. New Labour, however, sees constitutional reform as being essential in providing a modernised government and decentralisation, and has demonstrated this both with Welsh and Scottish devolution, and with House of Lords reform.
Generally, New Labour has toned down many of the socialist policies of Old Labour, finding instead a centre-left Third Way philosophy that tries to appeal to society as a whole rather than just the working classes, creating the possibility of votes from society as a whole.
There has been a definite ideological shift in the policies of New Labour. However, there have always been clashes in the Labour Party, particularly between those who want to transform the state (democratic socialists) and those who do not expect to change the nature of society but want to give the majority a fairer deal (social democrats). New Labour contains elements of both, but is generally an extension of social democracy, and therefore is largely consistent with strands of socialism which have always been present within the Labour party. Those with these beliefs, such as Tony Blair, would traditionally be in the minority in the party and therefore would not be able to win power. However, Tony Blair has tailored his policies into a Third Way philosophy, and in doing so has managed to appeal to a greater spread of the electorate than the Labour Party has ever before, while still maintaining core, fundamental socialist beliefs.
