"Labour's defeats provoked the party to modernise itself, by changing in order to embrace many of the changes that had been undertaken by the Thatcher and Major governments (R. Heffernan)." Discuss.

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Harry Dromey

POLI 31372 The Rise of New Labour

“Labour’s defeats provoked the party to modernise itself, by changing in order to embrace many of the changes that had been undertaken by the Thatcher and Major governments (R. Heffernan).” Discuss.

Following defeat in the 1979 General Election, the Labour Party was demoralised and in complete disarray under the leadership of Michael Foot.  Many believed that the party may never recover and that it was a spent force.  The party was nowhere near being considered a credible alternative to Thatcher’s Conservative Government.  Few trusted the Labour party and its programme was broadly incoherent, irrelevant and unpopular.  The party was plagued by bitter in-fighting, which eventually caused the formation of the SDP in 1981, and it had been seriously wounded by its economic failings in government, which included the notorious ‘Winter of Discontent.’    Britain was also changing in a way that was robbing ‘Old’ Labour of its core support.  ‘Old’ Labour did not appeal to a society with aspirations where individualism dominated and class consciousness was being eroded (Fielding, 2003, 86).  What is more, Thatcher’s Government did its best to compound these trends and became the ‘natural party of government.’  It became increasingly clear to many people inside the Labour Party that in order to survive, let alone ever form a government, the party would have to modernise and accommodate the preferences of the median voter (Hey, 1995, 704).  This required mimicking the Conservatives to a certain extent, who seemed to be the ultimate Downsian machine.  The modernisation process was incredibly slow and it was not until Blair’s election as leader of the party that the transformation into New Labour, as we know it today, was completed (Heffernan, 2003, 57).      

The 1980s and 1990s have seen profound changes in the British economy.  Some of these changes have been brought about factors out of the control of individual governments, for example demographic change, globalisation and, to some extent, technological change.  However, many changes have been the result of policy emanating from Thatcher and Major governments, for example, the acceptance of the mixed economy which the private sector dominates, industrial decline, privatisation and the liberalisation of labour markets.  The majority of these changes are realistically or politically irreversible and so Labour has been required to embrace them.  It was also essential that Labour won the economic argument, in order to get elected to government.  The Thatcher and Major governments had a much better reputation for economic competence for most of the eighteen years Labour was in opposition and the main reason that people did not vote Labour in the 1992 General Election was because of fears over how Labour would manage the economy (Ludlam, 2001, 115).  Labour had to broadly embrace Conservative Party economic policy to defend itself against attacks over economic competence.    

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The modernisation process finally abandoned Keynesian demand management as a tool to achieve economic goals.  Like the Thatcher and Major governments, the Labour Party now has a broadly neo-liberal approach to macro-economic management.  Labour policy now echoes Conservative Party fears that interventionist governments generally harm the economy and that governments should generally leave market forces to rule the economy (Heffernan, 2003, 50).  Therefore, since 1997, the Labour Government has done little to reverse the terminal decline of manufacturing in Britain (Fielding, 2003, 159).  The Labour Party also does not only accept, but has extended, privatisation and the role of ...

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