Thatcherism vs New Labour Party

The British political system went through various and complex changes over time, starting from the post-war consensus, going through Thatcherism and other parties policies activities and ending with the current government led by David Cameron.

This research paper will mainly focus on the policies and the ideologies of both Margret Thatcher and the New Labor party and how they affected the British political life so far that is by its role definitely affected in the formation of the economic shape and clarified the peaks and troughs that represented a wide variety of aspects of life in the United Kingdom.

Thatcherism is the political policies and way of government of Margaret Thatcher, which include privatisation, monetarism and lack of support for trade unions.

Margret Thatcher was the prime minister of the United Kingdom during the period (1979-1990) and her nickname was the “Iron Lady” Her policies marked a special era for Britain at that time.

The New Labour party is the alternative new branding name for the Labour party. This name was introduced by Tony Blair in a conference about a new life for Britain in 1994 and was put into action after the Labour party won the 1997 elections and stayed still till 2010.

So whose policies were better? How were they perceived by the public? How did they manage to practice dominance over the British politics? The answers to these questions will be listed when we go through Thatcherism and New Labour policies, ideologies, activities and effects over the political and economic aspects in the United Kingdom and figure out their similarities and differences.

Literature Review

There is a book that described Margret Thatcher as the most exceptional woman in the history of politics in the United Kingdom. It talked about her achievements, early career and how she acquired power. It also focused on explaining how the Conservative party at that time, led my Thatcher, was able to defeat the Labour party in 4 consecutive general elections. [1] 

Another paper presented the challenges that shaped the policies of both Margret Thatcher and Tony Blair. It elaborated on the main issues that Margret Thatcher focused on like privatization and lack of support for trade unions. On the other hand, it mentioned the “Manifesto” on which “the New Labour party fought on the 1997 elections pledged not to increase rates of income tax, and to hold public spending totals for the first two years in office to those planned by its predecessor” [2] 

In another book, there was a clear explanation of how the New Labour party attempted to gain back power and confidence in voters relying on and adhering to some Thatcherism policies. [3] 

Another book elaborated mainly on how the Labour party recovered from the 4 major defeats on the hands of the Conservative one and what changes they introduced in their policies to help them achieve the new outcomes of regaining power to the Labour party. [4] 

One more book described the era of Margret Thatcher and illustrated what were the successes and failures during her period in office and how she was able to confront the uprising economic and social challenges at that time. [5] 

Now we should go deep into the main ideas, policies, ideologies and features of both Thatcherism and New Labour.

The Ideological Orientation of Thatcherism & New Labour

Thatcherism was built upon: Classical Liberalism, which is concerned about the importance of individual freedom, and Conservatism, which is an advocate for the notions of national sovereignty, the traditional morals and the laissez-faire principles Thatcher developed her policies over time with her first government focusing on the reform of trade unions and monetary control (monetarism), the second focusing on privatisation and housing and the third focusing on the restoration of the welfare state in the UK. [6] .

Considering the New Labour ideology, Blair made a decisive break away from Old Labour’s traditional political stance and he called it as the party of ‘New Labour’ after becoming leader of the party in 1994. In policy terms, New Labour acted like the mediator between Old Labour, who was ‘statist socialism’ (they believe to be too radical), and Thatcherism, which was strongly concerned by the principle of laissez-faire and individualism as stated above. So Blair accepted many of his predecessors’ ideas about: free trade, the retrieval of a successful and elastic labour market through capitalism and more individual self-help, etc. [7] 

There were some obvious similarities between Thatcherism and New Labour, which were even more important than the differences between both of them. The New Labour party adopted many key elements of the Conservative policies in order to overcome its harsh defeat and decline that was very sharp especially and directly after the winter of discontent. The Labour party in the 20th century didn’t lose because of Thatcherism strength or popularity but because “There was no great endorsement of Thatcherism in 1979. As late as October 1978, Labour was still ahead in some opinion polls, but the ‘Winter of Discontent’ turned the public against Labour and the unions. The election was more of a rejection of Labour than an endorsement of Thatcherism” [8] 

Similarities in The Policies

Thatcher focused greatly on the economic reforming issue. She went through 4 main aspects and issues which are: the privatisation of the British Industrial methods, the narrowing of the union power and lack of support for it, the reduction of public spending in order to allow cuts in taxation and controlling the prices inflations. The New Labour was able to move away from the past when it declared the refusal and denial of the Clause IV from its constitution, which had become a keystone in the philosophy of the left. Commitment to public ownership was replaced by the view that the enterprise of the market and the rigour of competition are joined with the forces of partnership and co-operation to produce the wealth the nation needs and the opportunity for all to work and prosper. This marked the clear refusal by the New Labour for Socialism and marked its clear movement towards Thatcherism. [9] 

Considering the issue of taxation for instance, Gordon Brown made a clear and public commitment to remain within the Conservatives’ spending plans for the first two years of a new Parliament and not to increase the basic rate of income tax, showing again the adoption by New Labour of a key element of Conservative policy and also that was the “Manifesto” on which the New Labour party fought the 1997 elections. [10] 

It seems that New Labour’s economic policy is built upon a similar or a close one to that of Thatcher economic policy, where there is close-working relationship between the government and employers and trade union power was reduced and lacked significantly. It is also built upon the explicit endorsement of the importance of market competition and the desirability of private enterprise which is very close to the privatization policy by Thatcher. This policy shift is thought by many to represent a considerable acceptance of the broad legacy of the Thatcher years by Blair. Therefore it is evident that on these key issues, New Labour seemed to want to stay with the Thatcherism policies already put in place. [11] 

Differences in The Policies

Government Intervention in the Market

There were also clear differences in the economic policies of both Thatcherism and New Labour. For instance, New Labour refused Thatcher’s principle of Laissez-faire principle where the role of government and its intervention hardly featured. In accordance with this principle, Gordon Brown claimed that the government intervention is a must to provide more public services which will be more beneficial than cutting taxes for few people only. The New Labour party believed that it’s the duty of the government to interfere to prevent the under-investment of education and training that may take place in case of they relied only on the market forces alone. So they “sustained investment in skills, science, research and development, and public infrastructure encouraged strong performance in high-value manufacturing sectors far removed from financial markets in the UK” [12] 

Taxation Policy

The difference between Thatcherism and New Labour can also be seen when we look at the taxation policy. Thatcher believed in the motivation for low rates of direct taxation and she regarded this as a key part of her strategy of increasing competitiveness. Thatcherism also believed that direct cuts in taxations will help set the values of equality and the individual freedom in order to reach the welfare state. However, the New Labour was obliged to work according to 1997 elections manifesto where the government should not increase its public spending for the first two years of its formation. This manifesto briefly stated that the officials in Blair’s government should be “Wise spenders, not big spenders” Blair always believed that it’s not wise or rational to increase taxations because it will dangerously harm the economic situation and because the New Labour was more concerned with the likely vote-losing consequences of high taxation. However there were two contradicting opinions about the “tax increase” issue, one suggest by Blair and the other by Brown. Brown believed that “Labour should retain the power to raise the top rate” however, Blair and his advocates argued that increasing taxation rates is not the best guaranteed method to gain revenues: “to put up rates would not automatically achieve the desired result as evasion will increase” [13] 

The Social Welfare & Equality

Social welfare policy marked an obvious difference point between Thatcherism and the New Labour. New Labour believed in communitarianism which is ‘the existence of society with networks of social relations’. New Labour used the term “Positivity of Freedom” where people can get their chance to do things they need to do which are available for them through various resources, and the government intervention to provide these resources. New Labour didn’t ignore the socially excluded persons, it helped them empower and fill the lack of positive freedom and it made sure that everybody came out beneficial from economic growths. [14] 

The New Labour also marked unemployment as the biggest brick that forms inequality between people and according to Blair, “the best guarantee to earn a ‘decent wage’ was employability” The New Labour believed in the importance of coping with the world changing process towards information age and in order to develop more and more, they sought a society full of employed, skilled and trained workers so they tended to provide resources for people in order to achieve that development and progress goal. [15] 

On the other side, Thatcherism advocated for individualism and individual responsibility in place of collective provision and availability as stated in the ideologies part above ( The individual is the one who is responsible for welfare, not the society) resulting in limiting the role of the welfare state and New Labour refused this vision because they believed it would increase the internal divisions of the society and weaken the bonds between people although Blair was adhered to Thatcherism “one of whose aims was to shift responsibility for welfare from state to individual” at the beginning considering the issue of equality. [16] 

Dealing with the Electorate and the Voting Class

Another obvious and big difference between Thatcherism and New Labour is about how both of them dealt with the electorate. Margaret Thatcher preferred to convince the electorate to support her ideas and far sighting (to persuade them to accept her vision as it is) while New Labour tended to adapt their policies and regulations according to the voters’ visions and ideas, not the party itself and that is because the continuous processes of social change were tending to reduce the numbers of voters who favoured the government interventionist policies where the working labour class was gradually shrinking and getting oppressed while the middle classes who get paid for their work were expanding. [17] 

So it’s clear that the New Labour party introduced vast modifications to their policies considering the electorate issue and they adopted Thatcher’s method in order to win back the votes of people who lost confidence in them after the winter of discontent and to appeal to their new electoral target of ‘middle income, middle Britain’.

So it’s pretty obvious that, although similarities of ideas and policies towards many political issues are crystal-clear between New Labour and the Thatcherism, these similarities acted as the outcome of New Labour belief in the importance of getting confidence and trust back towards the voting class. Then it could be said that the differences are actually more important than the similarities as they reflect the true nature of the ideologies of the parties and how they acted to achieve their main purposes and goals.

Conclusion

It’s visibly noticeable about what we have been through along this study that The New Labour party has rose up at the ruins of Thatcherism, or in other terms, The New Labour has picked up where Thatcherism fell off.

No one can deny that the New Labour did really benefit from Thatcherism dominance from 1979 to 1997. Margret Thatcher was able to lead its party to three decisive consecutive victories in general elections followed by the fourth success led by Major.

The reasons of Thatcherism dominance over the British political life didn’t rise up from nothing. They rose up thanks to Thatcher’s policies and regulations. The people admired what Thatcher did considering the hindering of government intervention in the stock market, privatizing British factories and companies, direct cuts in taxations and much more.

Also, Thatcher’s economic policies played a leading role in getting favour and support from the electorate and the voters, some statistics about the effects of these economic policies, like a 32% increase in the number of workers in manufacturing, a 40% increase in household incomes, could prove that clear. [18] 

Nothing is perfect. Although Britain was a richer country under the Conservative government rule by Thatcher and there was surely an increase in the productivity (that was negative because “more goods were produced by fewer workers rather than increased capital investment), inequality also spread into Britain. Unemployment for example had hit more than 4.5 million Britons and 1 million out of those 4.5 was never involved in any paid employment. “One in six Britons were on social assistance, the highest proportion in the EU and three times the rate found in Germany” [19] 

In overall, the majority of British people benefited from Thatcherism than suffered. Thatcher was able to create a country that was never formed under any Labour government rule before and this was successful mainly because of, as we mentioned before, Thatcherism policies especially the ones regarding economic issues. That’s what pushed the Labour party autonomously to follow the same footsteps left clearly by the Conservative one and they did that in order to win people’s confidence back into their party, attract the voters and to gain power again over the British political arena and that reason was like the green light to the birth of the “New” Labour party which had SIMILIARITIES along with Thatcherism (which prove that New Labour really picked up where Thatcherism fell off) and had DIFFERENCES (Which prove that the New Labour party is ideologically different from Thatcherism and it didn’t copy or remake the latter steps, it did only follow the Conservatives in some specific points about which they were pretty sure that it will get their glory and shine back again into Britain political field).