In order to assess the impact of New Labour’s initiatives, it is important first to understand what is meant by the term ‘social exclusion’. Secondly, to understand the political landscape New Labour inherited when they came to power in 1997, for it played an influential part on shaping New Labour’s political perspective on tackling social exclusion.

The Social Exclusion Unit (SEU) defined the term ‘Social exclusion… [is] a shorthand term for what can happen when people or areas suffer from a combination of linked problems such as unemployment, poor skills, low incomes, poor housing, high crime environments, bad health, poverty and family breakdown,’ (Dutch,2000,p.201). This quote represents a summary of the key characteristics and interconnected factors now being tackled by the Government to eradicate social exclusion. However, it also illustrates the Government’s limited perspective of social exclusion by confining its problems on the notions of underclass and poverty. Poverty does underpin social exclusion, but a more holistic perspective would incorporate its causal factors such as concerns of exclusivity in the wealth and power of the rich.

Reversing the trends of inequality and social exclusion should therefore not simply be a case of focusing on the poorest but also on the inclusion of top earners too. For example, social inclusion would ideally require all people using the same services and institutions, i.e. transport, health and education. Abolishing public schools would be an inevitable reaction as they represent the English class system, and are a central mechanism of its reproduction. Unfortunately, this would be politically impossible because it fundamentally challenges the power and privilege of the elite that dominate politics itself. An understanding of the political framework New Labour has inherited helps explain why this approach is not feasible.

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18 years of Conservative government policy from 1979 to 1997 exacerbated the effects as unemployment, and numbers living in poverty soared to unprecedented levels since the post-war years. The neo-liberal, laissez faire capitalism of the Thatcher years served the interests of the rich allowing them to pursue freely their own interests and objectives. Nationalised industries were privatized, companies merged and formed (or were bought up by) global corporations and became internationalized. So the balance of power began shifting away from the national government.

New Labour extended this idea of freedom of the market by abandoning politicians final lever of control over the economy. Giving more power away to the banks and markets has allowed the free market to take over the responsibility for running much of society, and in a sense, allowed the elites to take over politics. To reduce the political role of intervening in the market was intended to reduce inequality (and therefore social exclusion), a new openness and fluidity in society would follow.

New Labour faced addressing the growing concern of social exclusion by keeping in step with global capital and economic progress. New Labour adopted the ‘Third Way’ approach, an attempt to ‘bridge the dichotomy between capitalism and socialism’ (Levitas) by fusing communitarian concerns of equality with that of the free market economy. In other words, find ways of raising the living standards of the poorest without curbing those of the richest. So New Labour’s commitment to tackling social exclusion sat firmly within a ‘Social Integrationist Discourse’ (SID) by ‘pursuing social integration through inclusion into paid work’ (Levitas, 2005.p,7), and a ‘Moral Underclass Discourse which ‘determines that paid work is necessary as a means of social discipline’ (Levitas, 2005.p,7), both of which take precedence over ‘Redistributionist Discourse’ (RED) which ‘equates the distribution of power and wealth to inequality’ (Levitas. 2005.p.7).

This is demonstrated in New Labour’s diverse initiatives that this essay focuses on. Part 1 of this essay focuses on the continuance of performance indicators and private provisions in public services initially orchestrated by the Conservatives – associated with the new right as they attempt to achieve better performance within a market led economy. While part 2 covers new anti-discrimination legislation, strategies to reduce poverty by increasing opportunities for employment and the introduction of minimum wages – all associated with the old left of social democracy.

Part 1

The government privatized national services and deregulated the markets believing that only the free market not politics could decide what people really wanted. An unrestricted market democracy took over much of the role of the politician and supposedly expressed the true will of the people. The government believed that people actually behaved in the way described by the simplified economic model. So, performance targets and incentives were set for everything and everyone, even cabinet ministers had to fulfil their performance targets.

However, New Labour began to discover that public servants were gaming the system to hit their targets, unfortunately to the detriment of the quality of service they provided. According to Curtis, when hospital managers were set targets to cut waiting lists ‘they ordered consultants to do the easiest operations first, like bunions and vasectomies. Complicated ones like cancers were no longer prioritised, (Curtis, 2007). Many other clever ways were found to cut the waiting lists in Hospitals.

The Police were also under pressure to meet their targets, such as reducing the number of recorded crimes. Again, inventive strategies were found that did not reflect their true performance. It has also been widely reported that teachers have interfered with student exam results in order to improve their school’s performance in national league tables.

The Governments response to the endemic gaming system was to introduce even more mathematical levels of management. Complex systems of auditing were created to monitor workers, and make sure they fulfilled the targets in the correct way. So, what had begun as a system of liberation turned into a powerful system of control thus creating a more rigid and stratified society.

‘In 2006, a series of reports made it clear that there was a definite link between the government policies in education and the rise of social segregation based on wealth,’ (Curtis, 2007). In education, performance indicators of league tables in schools showed parents which schools were performing best. The intention was to incentivise the less successful ones to compete and improve their services, standards would then rise across the country.

However, according to Gibbons and Machin, their research suggests ‘that there is a house price premium related to the performance of the nearest primary schools’ (Gibbons et al, 2007). This is because rich parents move into the areas of the best schools causing house prices to spiral, thus keeping the poor out, thus excluding the poor from the quality of education they are entitled to. Also, it is believed that many schools now teach their pupils only the narrow facts required to answer in exams, thus helping the schools rise up the league tables. What is lost is the wider education that could help the poorer children rise up in society.

Improving educational opportunities has always been at the heart of New Labour’s campaign against tackling social exclusion. Educational Action Zones were set up across the country to tackle issues such as the quality of teaching and learning; support to pupils and families; and to work with businesses and other organisations. However, the management of these zones have been put out to tender which means they may be run solely by private businesses. This potentially places parts of the education system in private hands where the curriculum can be bent to the needs of industry rather than the wider needs of the pupils. This move by the government undermines the role of local education authorities and local government, thus continuing, rather than reversing the trends of the imbalance of power over the last twenty years.

Private Finance Initiatives (PFI) was a scheme developed originally under the Conservative government, designed as a back-door form of privatisation by providing financial support for public services from private sectors. New Labour adopted this scheme. Unfortunately, the scale of PFI projects in the health and education sectors since 1997 is now having a serious impact on public service budgets. Because the projects are more expensive in the private sector (on average 30% more than if the Government borrowed the money and did the work in the public sector) the payments to the private owners of the PFI schemes are stretching already constricted budgets. As a result, vast amounts of money from the public purse are being transferred into the private hands of contractors, thus contributing to the unequal and unfair distributions of wealth and power.

It is the poor that are in greatest need for public services and suffer most from the substandard level of services, this is because it reduces the opportunities for those most at risk of social exclusion. This together with a political agenda that advantages the rich, does not bode well for New Labour’s objective in tackling social exclusion.

Part 2

Inequalities intersect with social divisions such as gender, sexuality, race, religion, age, and disability. Due to aspects of sexism, racism, ageism and disabilism that exist within a white male hegemony, certain minority groups are more likely to attain poorer educational achievements thus reducing future employment prospects. Income (or lack of) affects life chances in residential location, retirement, and health, which inevitably determines life expectancy.

For instance, analytical research undertaken by the cabinet office (2001) highlighted a list of compounding explanations for ethnic minority underachievement in employment. Minority ethnics are sometimes concentrated within certain communities that suffer high levels of socioeconomic deprivation, termed ‘ethnic clustering’ in order to maintain cultural, linguistic and religious ties. As a result, businesses remain over dependent on a narrow ethnic market thus limiting business growth and opportunity. Poorer language fluency, poorer health and the quality and location of childcare and transport facilities all contribute to less favourable outcomes for ethnic minorities.

New Labour have implemented new or updated current legislation to initiate a reverse in negative trends of social exclusion. The UK is constantly undergoing major demographic changes, so it is particularly important that policies reflect the diversity of our multicultural society. Without equal rights acts, the possibilities of employment opportunities for immigrants would suffer.

This would be detrimental to the economy, because immigration tends to keep the wages down for unskilled labour which in effect, can hold down the general wage rate for the whole economy thus bringing considerable gains for capitalists. Employment Equality (Religion or Belief) Regulations 2003, the Race Relations Act (amended in) 2000, the Age Discrimination Act 2006, and the Disability Discrimination Act 1995, (implemented before New Labour came to power) are all regulations that give people the legal right to complain about discriminatory behaviour based on age, disability, sexual orientation, religious beliefs, race, or nationality (including citizenship).

It is difficult to assess the impact how new legislations contribute towards equality of opportunity in employment. However, the inspection of earlier legislations relating to gender inequality may help give some indication. It is important that gender based inequalities in employment are addressed because children tend to stay with their mothers when parents separate, so the relationship between gender and child poverty is reinforced through family break-up.

Gender based inequalities are slowly being eroded thanks to the Sex Discrimination Act 1975 and Equal Pay Act 1970, introduced by the previous Labour government to reduce both the gender gap in employment and unequal pay. Although these regulations represent a significant step forward in addressing discrimination, indirect gender discrimination continues to persist. According to the Women ; Equality Unit, ‘since 1975…the full-time pay gap has closed considerably, from 29.5%… to 12.6% in 2006’. (Walby et al, 2006). This is a fair indicator that this particular legislation has helped bridge the gender pay gap, hopefully this trend will continue. However, ‘only 4% of Directors at Barclays Bank are female’ (Payne, 2000,p.78), and ‘women are still under-represented in the higher paid jobs within occupations, known as the “glass ceiling” effect’ (Walby et al, 2006). This may suggest that further changes need to be made other than anti-discriminatory legislation to reduce inequalities that are so firmly embedded in our culture.

New Labour wanted to relieve the economic costs of unemployment due to ‘lost production and benefit costs, policing the consequences of unemployment and exclusion, crime and disorder’, (Levitas, 2005,p.42). So paid work has been promoted in the New Labour agenda as a vital component of social inclusion because it provides a route out of poverty, and is a moral necessity to counter dependence, (a central element to MUD). Because full employment is difficult to achieve within a free market economy, the emphasis was on creating ‘opportunities’ to help people become more employable. Hence, New Labour’s aptly titled ‘Opportunity For All’ agenda.

One of the first priorities on this agenda was a Welfare-To-Work programme, in particular the New Deal which concentrates on young people, lone parents, long-term unemployed, disabled people and older people (50 plus). The programme was designed to offer personal advise for work search assistance and preparation for work. Lone parents are a particular priority for New Labour because unemployed lone parents are strongly associated with child poverty. Support is offered such as preparation for work, training, childcare, application for tax credits and in-work benefits. Also, financial incentives were introduced such as the National Minimum Wage (introduced in 1999), reductions in the tax burdens on low wage-workers, selective increases in benefits and tax credits were to encourage individuals with low earning power to find or remain in work.

Employment rates have increased by 6.6% between 1998 and 2003 for lone parents (Gregg et al, 2003,p.5), and child poverty has decreased by 4% from 1997 to 2003 (Hills et al, 2005,p.327). Although this improvement is unmatched in the EU, child poverty in the UK still remains one of the highest. Programmes such as the New Deal no doubt contribute to these welcoming statistics, but whether or not these schemes are close enough to impact on those most in danger of being excluded is questionable.

Although employment levels in general appear to be largely positive, it is important to note that these levels had been rising before New Labour came to power as the economy was recovering from the early 1990’s recession. Also, the reduced unemployment levels amongst men appear to mirror the increase of those receiving incapacity benefits which ‘increased from 6.1% of working age men in 1973-76 to 16.1% in 2001-04’ (Tomorrow Project), and numbers of those having been incarcerated. ‘Between 1993 and 2001 the average number of people in prison rose from 45,633 to 66,300, an increase of over 45%’ (Green, 2003). Therefore, although unemployment has fallen, more men are now inactive under New Labour.

It is important to remember that even if the unemployed achieve equal opportunities in the labour market, this will still mean that they are participating within a capitalist society that is fundamentally driven by profit based on exploitation. Therefore, the divide between rich and poor will remain. Also, ‘over one-third of disabled people (37%) say their disability prevents them from doing any paid work’, (Meager et al, 1998), this may suggest that welfare-to-work programmes will only ensure effective integration into employment for 63% of disabled people with the capacity to work. So this approach does not consider those individuals who are simply unable to work for physical and mental health reasons.


New Labour’s economic model of democracy appears to have undermined the very ideals of social democratic politics by exacerbating uneven distributions of wealth and power, and there shows no inclination to challenge the entrenched inequalities that contribute to social exclusion. As a result, an ever-increasing share of the wealth is going to a tiny proportion at the top of society. Performance targets and indicators only seem to have contributed to a more rigid and stratified society, thus reducing social mobility and deepening Britain’s Social class divide. ‘Children of rich families in the UK are much more likely to live and die rich than in the recent past. While children from poorer backgrounds, are much more likely to live and die poor.’ (Hills and Stewart, 2005,p.342).

Due to the government’s tax-benefit changes, minimum wage introduction, and schemes to encourage employment, New Labour’s old left approach has helped radically reduce absolute poverty, but only marginally benefited those in relative poverty. Being given a choice between being poor on benefits, or being marginally better off in employment will barely improve the situation for many individuals, especially if the standard and quality of public services that play a vital role in social inclusion are marred by pro-business agendas driven by targets to increase profit margins.

If employment is divided between very highly paid jobs for some, and very low paid jobs for others, the problems of social division and social exclusion are only intensified. For this reason, more radical initiatives need to be set in order to facilitate genuine social change towards equal opportunities. Unfortunately, striving for a true social democracy would be difficult if not impossible with the force of globalisation.


Curtis, A. (2007)

The Trap: What Happened To Our Dreams Of Freedom

BBC 2, 18 March 2007

Dutch, (2000) Central and Local Government Policies and Social Exclusion.

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(Accessed: 17/03/07)

Gibbons,S. Machin, S. (2007)

New Estimates of the House Price Premium for access to Good/Popular Primary Schools.

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(Accessed: 12/03/07)

Gregg, P and Harkness, S. (2003)

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(Accessed: 12/03/07)

Hills, J. Stewart, K. (2005)

A More Equal Society? New Labour, poverty, inequality and exclusion.

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The Inclusive Society? Social Exclusion and New Labour.

2nd Edn.

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Meager, N. Bates, P. Dench ,S. Honey, S. Williams, M. (1998) ‘Employment of Disabled People: Assessing the Extent of Participation.’

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Social Divisions

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‘The Story So Far’ The Tomorrow Project

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Walby,S. Olsen, W (2006)

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