A complex question - partly because equality encompasses both equality of OUTCOME and equality of OPPORTUNITY. Both are covered below.
For most of its history Labour has been a moderate, pragmatic, non-doctrinaire party. In particular, no Labour government has brought about a major and permanent redistribution of income and wealth, while it might be argued that the only truly radical government was that of Attlee after the war, which nationalised major industries and introduced most of the modern welfare state. Instead, Labour governments in the past have tended to focus upon extending opportunity, improving public services and industrial planning. Indeed, all post-war Labour prime ministers (Attlee, Wilson and Callaghan) were regularly accused by the left of betraying socialism.
The Blair ‘New Labour’ project was shaped by the party’s experience of eighteen frustrating years in opposition, during which time profound changes in the UK were brought about by the Thatcher and Major governments. Labour found itself having to adjust to, even accommodate Thatcherism, following four successive general election defeats. The party was also angered by what it saw as the deleterious effects of Conservative rule, in terms of widening inequality and deepening social division. The process of Labour party modernisation that began with Neil Kinnock in 1983 was driven by electoral imperatives that became stronger with each subsequent defeat. The increasing centralisation of power within the party and tough action against militant infiltrators was designed to reduce the likelihood of electorally damaging divisions. And, after 1992, the party concluded that it was now vital to improve its image of economic competence, and that this must involve the abandonment of traditional ‘tax and spend’ policies and an acceptance of much of the Thatcherite commitment to free markets and to the primacy of inflation control. The importance of removing this obstacle to electoral success led to Labour’s pledge not to increase either the basic rate or the top rate of income tax, as well as a commitment to remain within the limits of the Conservative government’s planned public spending increases for the first two years of a Labour government. This boosted Labour’s electoral credibility, though at the expense of the pursuit of greater equality through significant redistribution of income and wealth. Under the leadership of Kinnock and Smith, Labour had gradually moved back towards the political centre, jettisoning practically all of the electorally disastrous policies on which the 1983 election had been contested. The party’s internal organisation was transformed, while Labour steadily loosened its historic ties with the trades unions. Blair completed the transition in a highly symbolic way in 1995 when the old ‘Clause Four’ of the party’s constitution was replaced by a re-statement of the party’s aims and values in a modern context. The slogan ‘New Labour’ was also symbolic, as it was designed to distance the party from its past, and to underline the process of modernisation undertaken by the party and, in particular, the abandonment of Clause Four, which had committed it to collective ownership of the means of production. Labour’s radicalism had not in practice been confined to its 1983 manifesto. In 1974, the party had been elected with a commitment to bring about ‘an irreversible shift’ in wealth between the rich and the poor. The combination of Labour’s ‘revolution’ and the vast catalogue of difficulties confronting the Conservatives enabled Labour to win the 1997 election, and by a landslide.
Even now there is huge disagreement over where Labour stands ideologically, despite the insistence of both Blair and Brown that the emphasis has always been upon the restoration of traditional Labour values of fairness, justice and social inclusion. There had been an earlier attempt to update Labour’s ideology while in opposition in the 1950s, which had focused very heavily upon the need to bring about greater equality of outcome through the tax and benefit system. Anthony Crosland’s The Future of Socialism (1956) had contended that the debate about private versus public ownership was essentially dated, and that the Labour party should instead concentrate its attention upon the objective of equality. This became close to an act of faith for those on the social democratic Right of the party, many of whom were opposed to further exercises in nationalisation. Several of these eventually left the party in 1981 to form the SDP. Roy Jenkins, the SDP’s first leader, had been Deputy Leader of the Labour party in the early 1970s, while the other members of the ‘Gang of Four’, David Owen, Shirley Williams and Bill Rodgers, had all served in Labour Cabinets. Other social democrats, such as Dennis Healey and Roy Hattersley, had remained loyal to Labour and had fought the battle for moderation from within the party and against the Left. But their battle for moderation did not involve an espousal of Thatcherite market forces, but rather the old Crosland commitment to equality. Hattersley frequently criticised Blair for having written the pursuit of equality out of the New Labour script. To a large extent Hattersley’s reading was accurate. New Labour was committed not so much to greater equality as to greater equality of opportunity – a very different concept and goal, and one that has been readily adopted and pursued by the Conservatives. Indeed, Labour in office initially promised to ‘think the unthinkable’ with regard to social security benefits, since it had become mainstream orthodoxy within the party that more generous benefits, if anything, encouraged welfare dependency and did little to enable people to escape from poverty. Instead the emphasis was on ‘welfare to work’ policies, in part inherited from the previous Conservative government, and designed to tackle long term and youth unemployment and to persuade economically inactive groups such as lone parents to join the workforce.
Blair repeatedly acknowledged that Thatcher altered the political landscape, though always denied that New Labour represents any endorsement of Thatcherism. There has been some acceptance of market forces and competition, and of choice in the provision of public services, though policies such as the introduction of a national minimum wage, tax credits for poor working families and the social chapter clearly owe nothing whatever to Thatcherism. At the same time it cannot be denied that Labour adopted much of the Thatcherite agenda in areas such as macro-economic policy, privatisation, welfare reform, social policy, crime and immigration. Blair frequently justified the policy changes on the grounds that the more traditional social democratic approach is inappropriate in a rapidly changing, integrated and globalised international economic system where capital is increasingly mobile and free to shift to economies that favour the free market approach. In facing up to these often unpleasant realities, governments are constrained in their choice of policies, and are virtually obliged to opt for low rates of personal and business taxation, fiscal prudence, inflation targeting and deregulation. Indeed, Blair often appeared to welcome the global ‘triumph’ of neo-liberalism, and campaigned at international summits for the global deregulation of markets as a means of increasing competition, trade and growth, and of reducing income inequalities.
The Labour government, elected in 1997, was determined not to suffer the fate of its predecessors, all of which governments had encountered serious economic difficulties, and often crises. To this extent, Labour accepted the Thatcherite view that monetary stability and fiscal conservatism should take precedence over more traditional objectives such as full employment and income redistribution. At the same time, there was a significant departure from neo-liberal thinking in the shape of Labour’s strong conviction that increased public investment in health and education represented an investment in social capital, which in turn would increase the trend rate of growth. The new government was anxious to gain the trust of financial markets, and had already reached out to British industry while in opposition. To this end, it stressed from the outset the pursuit of macro-economic stability as a fundamental goal, highlighting its commitment to a low inflation target and to prudent management of the public finances. Gordon Brown argued that a stable macro-economic framework was a precondition of achieving sustained growth, higher levels of employment, greater competitiveness and an extension of opportunity. The tone was set when operational responsibility for the conduct of monetary policy, and thus interest rates, was handed over to the Monetary Policy Committee (MPC) of the Bank of England in Labour’s very first week in office. Brown also announced a new self-imposed ‘Golden Rule’ that required the government’s budget to be balanced over the course of a trade cycle; any borrowing would be for capital investment purposes only, and not to finance current government spending. Labour had already pledged in its election manifesto to adhere for two years to the plans for government spending inherited from the Conservatives. Never before in its history had Labour entered office with a commitment of this kind, although practically all the previous governments had eventually found themselves cutting public expenditure as economic conditions deteriorated. Labour’s decision to opt for a spending straitjacket ensured that the government would have to resist demands made by departments and pressure groups for additional spending and, indeed, would find itself cutting back on some social security benefits, much to the consternation of many of its backbenchers.
The key to greater equality for the new government lay not in more generous benefits for ooorer people, but rather in a clear strategy for creating employment. This was based largely on the extension of incentives and opportunities for the unemployed to search for, and then find work. This strategy required lower paid employment to be made more attractive, and to increase the size of the difference between income received in and out of work. The policies adopted to achieve this objective were very much in line with Labour’s more traditional ideology. A national minimum wage was introduced in 1998 that guaranteed all employees over the age of 21 a minimum hourly wage (of £3.60 in the first instance); the NMW applied also to those over 18 but under 21, though at a lower rate. A Working Families Tax Credit was also introduced, with income supplements to guarantee a minimum weekly income for households with at least one full-time worker. These measures were designed to increase the size of the workforce and to reduce welfare dependency. Another dimension was the government’s oft-stated belief that education and training, including for those out of work, were central to the preparation of the labour force for participation in increasingly competitive and globalised world markets. Central to the strategy, therefore, was the government’s obligation to equip the workforce with the necessary skills through education, training and re-training. Blair and Brown argued that economic prosperity and social justice were two sides of the same coin. Higher growth and prosperity provide the funding for the education and training programmes for the least well off in society, which in turn result in a more skilled workforce, greater efficiency and output, and still higher rates of growth. At the core of the employment strategy was the New Deal, a title appropriated from the US federal government’s 1930s recovery programmes, which was set up specifically for groups encountering the greatest difficulty in finding work. Originally it targeted 18-24 year olds, for whom participation was made compulsory; later it was extended to the long-term unemployed, to the over 50s, to lone parents and to the disabled. Essentially, the New Deal removed the option of claiming benefits, with qualifying groups required to take on subsidised employment or further education or training, or else voluntary work or work on an environmental task force. The stress upon work and training opportunities was consistent with the modern liberal approach that has existed since Beveridge, and with social democratic ideas of social inclusion, though there is a far greater emphasis upon the obligations of citizens to take full advantage of the various opportunities on offer. The same approach can be seen in the priority attached to education by Labour. Blair announced that his three top priorities would be ‘education, education and education’, viewing education not only as a vehicle for enhancing individuals’ opportunities, but also (as had the previous government) as a means of ensuring future economic success. This theme has been reiterated by Brown since he became prime minister.
There is little agreement over the extent to, and even the ways in which Labour has changed. For some writers (Fielding (1997), Giddens (1998)), there has been a radical transformation, with the party shifting towards a new radical centre, through the adoption of a ‘Third Way’ approach that at one and the same time pursues macro-economic stability, economic growth and social justice. For others (Hall, 1998), Hay (1999)), Labour has done little more than to accommodate key elements of Thatcherism, and in particular the neo-liberal commitment to markets, competition, consumer choice and welfare reform. The motive is seldom seen as true conversion to the faith, but rather crude electoral expediency, after four successive electoral defeats. If this is the case, then there is little that is new about the strategy (Coates, 1996), Jones (1996)). New Labour simply represents the particular and contemporary form of the revisionism that has always occurred when Labour has suffered election defeats; the party moves to the right, and couches the move in the rhetoric of modernisation. Perhaps the most common interpretation (Wickham-Jones, 1995) is that Labour has genuinely re-invented itself as a social democratic party, and that any concessions made to Thatcherism or apparent modernisation exercises should be seen as little more than incidental, though certainly necessary ingredients in this process. On this basis, 'New' Labour could be seen as bringing socialism up to date – the values haven’t changed (social justice, equality of opportunity, community, partnership, rights); instead, policies acknowledge that society has change. 'New' Labour is thus in the tradition of democratic socialism, but with a much reduced stress on unions, public ownership, state provision, and even redistribution.
Alternatively 'New Labour' could be seen as a radical transformation, from democratic socialism to social democracy. The key features are:
A stress not on institutions but rather on individuals and values
A stress not on what form an institution takes but rather how it can best benefit the community – so a stress on the mixed economy and on alternative ways of achieving desirable goals (support for Foundation Hospitals a classic case in point)
Prosperity and social justice rather than state control, together with a stress on the right to choose; this allows for alternative private provision of health, education, pensions
End of dichotomous class analysis – a recognition that society is complex, diverse, pluralistic
State is much more an enhancer and facilitator – there to guarantee opportunity and choice
Capitalism is thus a means to an end; the stress on individuals relegates the purpose of collective activity to improving opportunity and choice
Fair distribution of income, but not at expense of liberty – again based on expanding range of opportunities rather than state restricting choice and automatically providing (for example, in housing)
The welfare state should not stifle individual enterprise – hence a stress on providing job opportunities and equipping people with skills; key role of incentives to work
Secure greater equality from bottom up (people should make the most of their opportunities) rather than top down; but still protect the most vulnerable
Stress on inclusion and reduction of inequality, though there is a much broader understanding of equality which goes beyond the economic to focus upon equality for sexual minorities, outlawing of religious and racial hatred, acknowledgement of alternative lifestyles, etc.
Recent evidence has shown that income inequality in the UK is again increasing, despite massive transfers of funds year after year from the South to the North of England and Scotland. Brown is probably more in the 'Old' Labour tradition than was Blair, with a greater commitment to income redistribution, though this is increasingly difficult to achieve as the growth of the economy slows.
I hope this is helpful.