The Development of New Labour’s Ideology
The policies of New Labour both build on those of Conservative governments since 1979 and add significant innovations. Conservative policies towards the welfare state comprised fairly straightforward attempts at ‘recommodification’. Neo-liberal ideology saw the welfare state as effectively sapping the lifeblood of the capitalist economy, both through its reliance on high levels of taxation and state expenditure and through its effect of producing ‘dependency’
upon it, particularly by those claiming benefits. Hence the value of benefit payments was to be held down, whilst ever more conditions were placed upon claimants to ‘actively seek work’. State-owned services were to be privatised. The problem was seen to be state intervention itself, which was to be reduced wherever possible. The reality was, however, that sometimes it could not be significantly reduced, either because the market economy fundamentally relied upon it, or because of political ‘no go areas’ such as the privatization of health services. Thus, during the Thatcher decade of the 1980s, real public expenditure as a proportion of GDP averaged a still historically high 45.1 percent (Jackson, 2001, p. 99). In health and social care ‘quasi-markets’
were introduced aimed at achieving the efficiency benefits of the market whilst preserving the equity benefits of state-funded services (Bartlett et al., 1994). As Pierson (1996, p. 146) has argued, public support for the welfare state makes its simple dismantling virtually impossible: ‘A simple “redistributive” transfer of resources from program beneficiaries to taxpayers, engineered through cuts in social programs, is generally a losing proposition … Retrenchment advocates
thus confront a clash between their policy preferences and their electoral ambitions.’ Successful reform is therefore likely to ‘take the form of restructuring and modernisation of the social contract’ (Pierson, 1998, p. 539). Thus simple ‘recommodification’ or privatisation of the neo-liberal type is unlikely to be successful in welfare services. Even in Thatcher’s Britain, ‘reform has been incremental rather than revolutionary, leaving the British welfare state largely
intact’ (Pierson, 1996, p. 173).