New Labour and the Rejection of Stakeholder Capitalism

Abstract

New Labour is the result of a continuous process of modernization begun by Neil Kinnock and continued by John Smith and Tony Blair. So in a sense, New Labour was ‘born out of the ashes of the old’ (Pimlott, 1997, p. 328). The most important aspect of New Labour is that it is not old Labour. As we entered the 1990s questions were being asked about what was the difference between the Labour Party and the Conservative Party. In the 1992 election campaign the Conservative Party succeeded in convincing the electorate that the main difference was taxation policy. Thus Labour were still seen as the high-taxation, high-spending, interventionist party. This was to have an influence on the modernizers in the Labour Party. A key element in transforming Labour into ‘New’ Labour was the abandonment of the old Clause Four of the Labour Party constitution. Although this meant little in terms of policy, it was a symbolic gesture which made it clear that New Labour was a party that believed in capitalism. It was this and Tony Blair’s leadership which attracted business to New Labour. By the end of 1996 donations to the Labour Party amounted to £6 million. What we saw prior to the 1997 General Election was the repositioning of New Labour under the leadership of Tony Blair.