Since 1979 there have been dramatic changes in both the structure and organisation of the Labour Party. In part, this was in response to their failure to win a general election between 1979 and 1997. However, the change goes much further than that and can be perceived as a reflection of the continued struggle between ideologies of different factions within the party. This essay will first try to establish what ‘Old’ Labour was and what it stood for. Then, scrutinising ‘New’ Labour, this essay will discus if, how and why the Labour Party changed and identify the key differences between ‘old’ and ‘new’ Labour.
The Labour Party was initially established as a party to represent the newly enfranchised working class in Parliament. Growing out of the Labour Representation Committee (LRC), the party owed its existence to various trade union and socialist organisations. Consequently, right from its inauguration, the party’s primary purpose was to elect MP’s that would represent the interests of the unions. Although ostensibly not a committed socialist party, by 1918, the party had included Clause 4 in its election manifesto, the principle of public ownership which committed the party to nationalising land, coal mining, the electricity industry and the railways as well as declaring their intention to make rates of taxation steeply progressive to fund a major extension of education and social services. Labour soon overtook the Liberals in popularity and rose to be the principle opposition for the Conservatives, forming three governments between 1926 and 1945.
Post-war Labour fundamentally recognised the relationship between state and society in Britain and introduced a number of reforms in education, social security and welfare in an attempt to lay the foundations for a new, more caring society. The post-war Atlee government sent Labour on a trajectory towards socialism with commitments to economic planning in an attempt to reduce unemployment, a mixed public and private sector economy and a comprehensive welfare system which was endorsed by successive Labour and Conservative governments until 1979 when Thatcherism ideology took over. During this time Labour was widely perceived as being orientated towards a socialist perspective as the government took responsibility for unemployment, healthcare and housing.
After Labour’s defeat by the Conservatives in the elections of 1979, the party went through a period of considerable internal turmoil that ultimately resulted in extensive reform of the structure and organisation of the Labour Party. Since 1979, there have been three distinct phases of change as ‘Old’ Labour became ‘New’. These can be defined as The Bennite challenge, Modernisation and New Labour.
The first phase of this, the Bennite challenge led by Tony Benn attempted to redress the balance of power within the party. Aided by the leaders of some major trade unions at a special party conference in 1981, the party’s left wing activists succeeded in forcing through a number of internal organizational reforms that enhanced the power of grass-roots activists and trade unions in the selection of parliamentary candidates and party leaders. This change meant that ‘the party would now be committed to bringing about a fundamental and irreversible shift of power and wealth towards working people and their families’. In response, a number of leading parliamentarians and supporters seceded from Labour and founded the Social Democratic Party in 1981. Labour presented a radical manifesto that proposed extensive nationalization of industry, economic planning, unilateral nuclear disarmament, and the withdrawal of the United Kingdom from the European Economic Community.
The result was Labour’s worst national electoral defeat in more than 50 years. It was after this defeat that modernisation took place under the new leader of the Labour Party, Neil Kinnock, a politician who, despite his leftist credentials set about re-establishing Labour as a credible national electoral force. Kinnock’s “modernisation” process towards the beginnings of a ‘New Labour’ contributed to Labour’s electoral revival after the trauma of 1983. As well as explicitly rejecting nationalisation as a tool or goal of economic policy, Kinnock ‘set out to crush the revolutionary left by launching a series of expulsions of supporters of the Militant Tendency’ but it was not sufficient to deprive the Conservatives of their governing majorities in the general elections of 1987 and 1992.
By the time that Blair took the Labour Party leadership in 1994, the leadership had reasserted its authority having introduced significant organisational reforms which broadened and centralised the decision making process within the party as well as removing all trace of links with Marxist socialist ideology. Traditionally, there had been a strong socialist link with the Labour Party through Clause 4. Despite opposition from many of the Old Labour leaders, the rank and file of the party was insistent on maintaining its Socialist roots right up to the 1990’s. In stark contrast to the rest of Europe, which by 1980 had largely rejected a fully-fledged socialist ideology, Labour maintained Clause 4 that sought to maintain its ideology of socialism and nationalisation.
Clause 4 of the Labour Party’s constitution was an integral part of the party’s philosophy and ideology as it marked the party as ardently socialist. Clause 4 is as follows; “To Secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible up the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service.” The clause is clearly anti-capitalist and commits to replacing capitalism with a system of social ownership, justice and planning where more control is given to ‘the workers’. Dearlove and Saunders propose that in practise, Old Labour was happy to accept a capitalist economic order although they sought limited social ownership through nationalisation, limited redistribution or wealth and income through taxation and welfare and limited planning through national agencies. In practise then, Dearlove and Saunders suggest that Labour should have been considered as a ‘social democratic’ party rather than actively pursuing its formal socialist objectives.
Following the election of Tony Blair in 1994 as leader of the Labour party, the party saw a series of programmatic and organisational changes; the party systematically reviewed its policies so as to re-embrace the mixed economy in the tradition of the revisionists of the 1950s. Labour had consistently struggled to fully implement socialism, and reject the capitalist system because of what many critics believed to be a lack of a proper plan of how to implement their socialist ideology and replace the capitalist system. Blair took the modernisation of the party to a new level, adopting the American idea of rebranding the party as ‘new’. The slogan, ‘New Labour, New Britain’ was unveiled and stuck as the new party name. Blair believed that the Left had to ‘modernise or die.’  With the rejection of Clause 4, Blair and the modernisers showed little respect for Old Labour’s sacred cows; “state ownership, economic planning, Keynesian demand management, full employment, tax-and-spend welfarism and close links with the trade unions” and brought Labour back to win the next General election.
New Labour is itself a contested term. There is much debate as to what exactly it means. Michael Freeden suggests that the ‘ideological map’ of New Labour is “…located somewhere between the three great Western ideological traditions – liberalism, conservatism and socialism – though it is not equidistant from them all.” Some suggest ‘New’ Labour is nothing but a marketing ploy and product of Alistair Campbell’s PR campaign for Labour in an attempt to win votes. During the 1997 election campaign, the Conservatives tried to convince voters that New Labour was simply ‘Old’ Labour in disguise using the ‘New Labour, New Danger’ slogan.
Some political scientists, notably Driver and Martell assert that the political positioning of ‘New’ Labour is nothing more than Liberal Conservatism. They would argue that ‘New Labour’ is simply an extension of Thatcherism inasmuch as it is no different from Thatcherite attempts to blend traditional conservative and classical liberal principles. Pointing to Conservative prescriptions regarding education, the family and welfare, they assert that ‘New Labour’ is simply a progression of Thatcherism. Blair sees ‘New Labour’ as a new means to an old end, believing that the party has the same values yet is using new ways to achieve these aims.
Apart from the rejection of Clause 4, how then is ‘New’ Labour different from ‘Old’ Labour? Dearlove and Saunders regard ‘New Labour’ to be Liberal Socialism. New Labour has rejected its classed based socialism in exchange for what many believe to be ethical socialism which has been largely influenced by Blair’s own Christian beliefs and the Labour ‘tradition of self help and mutual aid. Dennis and Halsey have defined ethical socialism as ‘a moral community in which freedom is gained for every member through the sharing of what they have, in equal mutual respect for the freedom of all’. Where Thatcher ‘sought to temper the free market individualism of neo-liberalism with an emphasis on traditional conservative values’ Blair has tried to temper the individualism of neo-liberalism with traditional ethical socialist values of equality, fraternity, self improvement and moral rectitude, in an attempt to amalgamate neo-liberal economics and socialist ethics.
Whereas ‘Old Labour’ had been based on the big ideas of socialism and collectivism for the advancement of the working class, ‘New’ Labour attempts to reconstruct the state with more democracy and individual responsibility based on ‘co-operative self-help’ and the idea of communitarianism whereby individuals have a responsibility to help themselves and those immediately around them in their community. There is a new emphasis on social cohesion and ‘New’ Labour’s attempts to repair the social fabric of society. ‘New’ Labour is attempting to maintain the dynamic, innovative and efficient aspects and advantages of a liberalised economy whilst trying to avoid the inimical and often inevitable social fragmentation. One aspect of this is the shift from the ‘Old’ Labour stance on providing a large welfare state as a means of creating a more egalitarian society to ‘New’ Labour’s smaller welfare state which is based on the principle of ‘hand up, not hand-out’ and the idea that the community and the individual should exist for each other’s benefit.
The Ethical Socialist ideals are further perpetuated with ‘New’ Labour’s belief in stakeholder capitalism – the idea that every citizen must be included in the society they live in by being made to feel they have a long term stake in it using the idea of the welfare state and universal provision of services such as healthcare and education.
Unlike ‘Old’ Labour’s focus on the interests and needs of the working classes, the trade unions and the poor, ‘New’ Labour concerns itself with the interests of consumers, especially middle Britain and a new deal for citizens. Anthony Giddens argues that this is largely in response to the impact of ‘post-materialism’. This idea asserts, “after a certain level of prosperity has been reached, voters become concerned less with economic issues than with the quality of their lives.” In order to get the middle England vote, New Labour needed to accommodate for these voters. Giddens also suggests New Labour’s shift is a reflection of class dealignment and the decline of the blue collar, working class which meant Labour could no longer rely on a consistent ‘class bloc’ to vote for them.
‘New’ Labour has largely rejected a Keynesian style economy using demand management style that had been characteristic of ‘Old’ Labour. ‘New’ Labour has also rejected its former ideology of nationalised industry and public ownership replacing this with a much more free market approach and even privatisation of some former publicly owned services such as the London Underground.
To argue that there are no discernable differences between ‘Old’ and ‘New’ Labour would be both naïve and crass. Like most political parties, since its inception, Labour has evolved, changing both its organisation and ideology to reflect changes in society and voters needs. The gap between the Left and Right has significantly narrowed with ‘New’ Labour policy and there are undeniable elements of Thatcherism in ‘New’ Labour although it is certainly not merely an extension of this. Perhaps the most significant change to ‘New’ Labour, the amendment of Clause 4, can be attributed to class dealignment and the decline of the working class that has shifted Labour far away from its socialist and nationalising policies that used to provide the core of its ideology. ‘New’ Labour no longer seeks to nationalise and plan but rather prefers equality of opportunity rather than outcome. ‘New’ Labour is no longer the preserve of the socialist working class; it has been transformed into a party for middle England as much as the workers.
 John Dearlove and Peter Saunders – Introduction to British Politics 3rd Edition, Polity 2000 p.394  ibid p.397
 John Dearlove and Peter Saunders – Introduction to British Politics 3rd
Edition, Polity 2000 p.402  The former ‘Clause 4’ of the Labour Party constitution  Tony Blair, speech to the Part of European Socialists’ Congress, Malmo, 6 June 1997  Stephen Driver and Luke Martell – New Labour, Politics after Thatcherism 1998 Polity, p.12  Michael Freeden – The Ideology of New Labour – Political Quarterly 70 (1999) p.48  Anthony Giddens – The Third Way: The Renewal of Democracy Polity p.19