The political transformation of the Labour party into New Labour has traditionally been seen by historians as a significant shift, chiefly influenced by the electoral success and political dominance of Margaret Thatcher and so-called Thatcherism. This interpretation has been based on a variety of factors, especially when Thatcher said Tony Blair and New Labour when asked what she considered her greatest achievement, heavily implying that she considered New Labour an accommodation with the politics of Thatcherism. New Labour's Third Way policies were not just influenced by Thatcherism however. Other shifts such as internal Labour Party movements and demographic changes also played a part.
The traditional view that New Labour was almost exclusively influenced by Thatcher proclaims that the policies and success of Thatcherism caused Labour to adapt to a political climate forever changed by what Thatcher accomplished in her years in office. Simon Jenkins argues that the New Labour governments didn't reverse any of the key policies of the Thatcher ministries, stating, Blair and Brown brought their colleagues round to accept the Thatcherite settlement. He suggests that New Labour must have been influenced by Thatcher, as their core policy platforms were very similar. Jenkins claims do hold some weight, as Labour's 1997 manifesto shows with Blair admitting in his foreword; Some things the Conservatives got right. We will not change them. The manifesto also contained no commitments to renationalisation, and strengthening trade unions. This, and the commitment of maintaining Conservative spending for the first two years of government, is reliable evidence that Labour were being directly influenced by the economic policies of Thatcher. While manifestos have their problems as evidence (because governments don't always follow through on their promises), they can be a useful indication of what parties intend to do and the general direction they are taking.
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Anthony Seldon argues that Blair owes much to her legacy and that her policies of reducing the role of central government, boosting individualism⦠have been directly copied by the Labour Prime Minister since 1997. Seldon indicates that Thatcher's cornerstones in terms of both policy and attitudes were copied by Blair and her influence is very significant, given that these policies and values had not been adopted by a Prime Minister before the Second World War. Therefore, it seems far more likely that it was her influence that inspired Blair into the New Labour transformation, rather than any other leader, especially not former Labour Prime Ministers. Seldon even goes on to say that Blair owed more to her than James Callaghan or even Harold Wilson. That opinion is given weight by accusations by those on the Labour left who referred to Blair as a neo-Thatcherite, many MPs even rebelling against more Thatcherite policies such as Tuition fees, which barely passed the House, despite Labour having an enormous majority. If it weren't for the Conservatives voting in favour of the Education and Inspections Act 2006, it wouldn't have passed, indicating that New Labour's policies had strong Thatcherite elements.
However, Seldon and Jenkins ignore key areas of policy in which Blair and New Labour as a whole differs wholeheartedly from the Thatcherite Conservative party. In terms of social policy, Labour's emphasis on a generous welfare state and progressive social reform were entirely at odds with Thatcher's policies. For example, New Labour's policy of creating the Food Standards Agency, in effect regulating the food and catering industry. Indeed, the agency, created in 2000, conflicts with Thatcher's belief that the market will solve most problems. This also conflicts with Seldon's assertion that Blair continued reducing the role of central government and boosting individualism, as also evidenced by the greater welfare state. Furthermore, Seldon's argument falters to some extent on a crucial area of policy: the National Health Service. The average yearly health spending increases under both Blair (6.1%) and Brown (5.4%) are in stark contrast to those under Thatcher (2.7%). These figures come from the Institute for Fiscal Studies, which is a reliable source of data. The implication here is that, while Seldon may be correct in suggesting Thatcherism's influence over Blair (and consequently New Labour) was significant, it arguably applies a lot less to social policy than it does to economic policy.
An alternative explanation for the New Labour project is that it was not an accommodation with Thatcherism, but rather an accommodation with a more middle class, less ideologically left-wing Britain. The idea here is that New Labour essentially had to broaden its appeal as its own traditional base decreased in size. Indeed, it is true that the percentage of workers in Trade Unions sharply declined over the 18 year course of the Thatcher and Major ministries, from 52.7% in 1979 to 27.3% in 1997. This conveys a decline in what can typically be seen as solid Labour voters. Furthermore, John Curtice put forward the case that in 1979 Labour had a much larger base of core support compared to the Conservatives (35% for Labour, 26% for the Tories). But, by 1997, the Conservative core had grown to 37% of the electorate, while the labour core had shrunk to just 20%. This suggests that, while other factors were certainly at play, the constitution of the British electorate changed over the course of those 18 wilderness years for Labour in such a way that proved highly disadvantageous for the party. This constituted an upwardly mobile working-class and a growing middle-class, groups that were historically far more likely to choose the Tories on election day. Thus, we can posit that New Labour's politics was less about ideology and more about demography. Blair himself recognised this when he described the exact moment I knew we'd lost the 1992 election.when a man described his change in voting allegiance from Labour to Tory after buying a house and setting up a small business. His instincts were to get on in life, he thought our instincts were to stop him Blair said. The fact that the most influential figure in the creation of New Labour seemed to be concerned with the difficulty Labour was facing with the upwardly mobile working class, homeowners, small business owners, and the fact that they were an expanding group in society, indicates that New Labour was significantly influenced by these demographic changes. However, Curtice rightly acknowledges while these trends were occurring all over Europe, they had also been actively encouraged by Conservative governments. Therefore, in this regard New Labour can be seen as an accommodation with Thatcherism to an extent, as policies like the right-to-buy scheme increased private home ownership and created a demographic shift in favour of Thatcherite policies.
Overall, New Labour did represent an accommodation with the politics of Thatcherism. Going even further than Thatcher on privatisation and introduced tuition fees, New Labour's acceptance of Thatcher's influence is evident not only in Tony Blair's admiration for the Conservative leader, but also in Labour's total abandonment of public ownership, high financial regulation, and military pacifism. However, the effect of changing demographics and the gradual disappearance of Labour's core voter base was arguably an influence over New Labour. Yet, much of those changes can be put down to changes the Thatcher Ministries made. New Labour's acceptance of deregulation and reduction in government economic intervention was more of an accommodation with Thatcherism than internal Labour Party movements, as its own pre-Thatcher revisionism never went as far as to argue for a removal of the post-war consensus. Margaret Thatcher had made widespread changes to the British economy and to British society, to which Labour made little to no effort to dismantle or reverse, conveying that her influence was significant. The Labour party that came to power in 1997 had very different views from the one that left it in 1979, indicating that over the course of 18 years of Conservative rule, Thatcherism had fundamentally altered the nature of the party. After all, the Iron Lady herself seemed to regard New Labour as an achievement of hers and Thatcherism itself.
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