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Tony Blair’s revolution

25 years on, was New Labour worth it?

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April 28, 2022

Tony Blair is hated up and down the land but not in Islington, and not in Labour HQ. Speaking to the FT last summer, Keir Starmer embraced Blair’s legacy. “We have to be proud of that record in government,” he said, “not be arm’s length or distant about it.” 

To Labour’s Right wing, Blair remains the closest thing to a living saint. The former PM is their yogi, whose “rare interventions” — on Brexit, on Covid lockdowns, on higher education — are holy writ. But for normal people, who do not dream of May 1997 each night, Blair is a scoundrel.

To some extent this is to be expected. Blair governed for a decade. His mistakes were made in the public gaze — a gaze that tired of seeing his grin in the newspaper every day or his studied sandbagging on the evening news. Thus it is somewhat unfair to compare him to Alan Johnson, a Labour figure who is liked not because of any political accomplishments but because, to most, he is an affable TV raconteur. The same applies to Ed Balls and his ongoing rehabilitation via Strictly Come Dancing and Good Morning Britain.

The hatred Blair inspires is much more reminiscent of Margaret Thatcher, a similarly divisive yet successful politician who remade both party and country. Yet a decade after her death, she sits among the most popular of all Prime Ministers. She retained admirers, even as she was savaged by her enemies, and savaged them in turn. 

Blair was much more ameliorative than Thatcher, or at least he tried to be. Here was a mainstream leader who consciously aimed for the centre of public opinion. What Blair wanted, more than anything, was to be loved. So why is he so widely reviled?

The most common answer is Iraq. Without that war, moderates often argue, Blair would be remembered as a successful national leader. But even if we remove Iraq — the gravest British military blunder since the days of General Gordon — from an assessment of Blair’s legacy, he was a failure. One could argue he is even oddly fortunate that the scale of the debacle both there and in Afghanistan overshadows his domestic record.

Yes, there was Sure Start, and the introduction of a minimum wage (though that one belongs as much to John Smith as Blair). And yes, Blair funded the NHS properly for the first time in decades — though it belies the limits of his tenure that this was wiped out in a few years of Tory austerity.

Today, Blair’s most overwhelming legacy, and the one that affects millions of ordinary people in Britain every day, is housing. In 1997, as Labour won their largest ever parliamentary majority, the average income was £15,000 a year while the average property cost £65,000. By 2007, as Blair left office, average pay had risen to £20,000 — but house prices had surged to an extraordinary £190,000. In other words, relative to wages, and under a Prime Minister who spoke relentlessly of expanding opportunity, the cost of housing had doubled.

Given this, it is unsurprising that Gen X pundits, more socially liberal than boomers but whose cultural zeitgeist was defined by unprecedented property price rises, are the Blairite vanguard across much of the media. As any Marxist will tell you, conditions (often) determine consciousness. For Britain’s Gen X, the New Labour rise in property values — with its attendant sensation of prosperity — still feels like a successful project which merits defence. Yet the flip side to that phoney progress is today’s housing crisis, with home ownership falling from 70.9% in 2003 to 63.9% in 2018, and those between their mid-30s and mid-40s three times more likely to rent today than 20 years ago. The phrase “property-owning democracy”, on which the popular conservatism of the last century rested, is withering on the vine.

For now this remains primarily a problem for younger adults — although the ONS recently warned that the majority of older people will be living in rented accommodation in the future. Those same people burdened with thousands in student debt, another New Labour bequest, are increasingly likely to give up to half their post-tax earnings to a landlord. The Blairs, meanwhile, own a property portfolio worth approximately £35 million. Cherie Blair now oversees not one but two property management companies, including dozens of one-bedroom flats.

The surge in house prices after 1997 was no accident. Buy-to-let mortgages increased 30-fold under Blair while his government built fewer council homes than Margaret Thatcher. And while Blair certainly isn’t the prima causa of today’s housing crisis — the policy of right-to-buy in the Eighties was the catalyst, while supply issues are a major variable — it is remarkable that something as elementary as home ownership was permitted to become a luxury under a Labour government. 

Alongside this abysmal record on housing, New Labour oversaw a historic collapse in British industry. Between 1997 and 2007, output from all manufacturing, value adjusted for inflation, fell by 3% — while a million workers lost their jobs. Despite the post-industrial paeans of New Labour this was not inevitable: over broadly the same period, between 2000 and 2006, manufacturing output rose in the US, Germany and France. Most striking of all, manufacturing as a share of the overall economy fell more under Blair than Thatcher and Major combined.

All this was presented as a cause for celebration. For New Labour, deindustrialisation was a necessity. A small bump on the road to the “knowledge economy” that Britain must become. At the the turn of the century, Blair’s ambition was that Britain would become the best country in the world for “e-commerce”. The land of Newcomen, Watt and Bessemer, transmuted to a nation powered by lattes and online shopping.

Whether Blair had the faintest idea what he was talking about is unclear. This was a man, after all, who didn’t use a mobile phone until 2007 and whose first text message to his fixer Alastair Campbell read: “This is amazing, you can send words on a phone.” So Blair’s evangelism for the digital age wasn’t the result of any acquaintance with the possibilities of the internet. Rather he had found a compelling story to distract from the continued, and indeed intensifying, disintegration of national industry. Conveniently, this same story allowed Blair to present himself as modern and the blue-collar base of his party as backward.

A mixed domestic record is leavened by a series of foreign policy disasters. Blair is synonymous with Iraq and Afghanistan, and always will be. Britain spent £37 billion in Afghanistan, and lost more than 450 military personnel. For what? Two decades later, the Taliban have returned and the country is facing widespread starvation. In Iraq, the most secular country in the Arab world at the turn of the millennium became a hothouse for sectarian militias, then ISIS. Mission accomplished.

In the long-run the New Labour project, and Blair’s stewardship of it, can only be seen as a failure. The broader economic context of the Long Nineties — a goldilocks era of cheap energy, low inflation, and high growth — could not have been more kind to New Labour’s Nero. And yet, as Chinese consumer durables flooded the West, and cheap credit fell from the skies, Blair and Brown praised themselves for abolishing boom and bust. At the very least, New Labour might have built council homes, a national network of high speed rail, and prepared for climate change. They did none of it.

When asked about her greatest achievement Margaret Thatcher replied: “Tony Blair and New Labour.” The real legacy of Blair is that he not only cemented much of the Thatcherite settlement but, worse, made many believe that doing so was somehow progressive. Until that’s recognised for the mistake it was, Britain’s broken economic model, not to mention its housing crisis, will only get worse.