New Labour claims that its ‘third way’ represents a new and distinctive approach that differs from both the old left and the Conservative right. There have been many attempts to position the third way on a left-right continuum (see Driver and Martell 2000). On the one hand, New Labour claims that it is a left or left of centre party, with the third way seen as a modernised or renewed social democracy (Blair 1998; Giddens 1998, 2000). On the other hand, it has been argued that there has been a significant convergence between New Labour and the Conservatives, resulting in a new consensus of ‘Blaijorism’, or perhaps now ‘Hagairism’.
However, this approach is too simplistic as the picture is more complex and nuanced. First, there remains considerable debate about the content of the labels of the first and second way. Crouch (1997) claims that there have been four distinct ‘Old Labours’. It is unclear to what extent Labour was ever a ‘socialist’ or even a ‘social democratic’ party, and the broad church of Old Labour includes individuals as diverse as Attlee, Bevan, Crosland and Benn. Similarly, the Conservative right is an uneasy mixture of neo-liberal and neo-conservative tendencies. There has been some rewriting of history, caricaturing the old left and the new right in order to create space for the third way (Economist 1998; Levitas 1998; Navarro 1999).
Second, attempts to place ‘the third way’ on a left-right continuum give too much coherence to a term that defies simple description. Like Old Labour, the third way is a broad church. It is very diverse, including some policies such as the minimum wage associated with the old left and the Private Finance Initiative of the new right. Third, Crouch (1997) points out that in many ways the Labour election victory in 1997 is more similar to Conservative victory of 1951 than the Labour victory of 1945. Labour could not wish away the previous eighteen years, and was forced to build on a landscape inherited from the Conservatives. Its response was not wholesale abolition of Conservative policies, but an selective attempt to reform the reforms. Some policies such as the purchaser/ provider split in the NHS were incrementally changed, while others such as the Assisted Places scheme in education and tax relief on health insurance for elderly people were abolished.
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As Blair argued in the Introduction to the 1997 Manifesto (Labour Party 1997) ‘Some things the Conservatives got right. We will not change them. It is where they got things wrong that we will make change.’ This is more policy adaption than policy convergence. It follows that it is meaningless to place the third way on a left-right continuum which exists in a timeless policy vacuum. Rather than comparing third way policies to what Old Labour did, such as Keynesian full employment, the more difficult counterfactual exercise is the comparison between what Old Labour might have done in today’s circumstances.
Using examples from welfare reform, the complex roots of the third way are examined in terms of something old, something new, something borrowed and something blue. Before this, a useful starting point is to map out some of the territory of the third way and the welfare state.
New Labour and the Third Way in the British Welfare State
This section presents a brief account of the dimensions of the third way as applied to welfare reform. For heuristic purposes, these are laid out in Table 1 and examined in more depth in the subsequent discussion. More detailed treatments may be found in Ruth Lister’s article in this issue as well as Driver and Martell (1998), Levitas (1998), and Powell (1999, 2000).
Dimension Old Left Third Way New Right
Approach Leveller Investor Deregulator
Outcome Equality Inclusion Inequality
Citizenship Rights Both Responsibilities
Mixed Economy State Public/Private; Private
of welfare civil society
Mode Command Co-operation/ Competition
and Control Partnership
Social Expenditure High Pragmatic Low
Table 1: Dimensions of the Third Way in Welfare Policy
Many elements of the third way were flagged up in the Commission on Social Justice (CSJ 1994), which was set up by Labour leader John Smith as a semi-official body, at arms length from the party. It rejected the approaches to social and economic policy of the ‘Levellers’ – the Old Left- and the ‘Deregulators’ – the New Right, and advocated the ‘middle way’ of ‘Investor’s Britain’. This approach features much of the discourse which was to become central to New Labour: redistributing opportunities rather than just redistributing income; transforming the welfare state from a safety net in times of trouble to a springboard for economic opportunity; an active, preventive welfare state; paid work for a fair wage is the most secure and sustainable way out of poverty; and the balancing of rights and responsibilities.
An Investor’s welfare state is proactive, emphasising prevention, and stressing causes rather than effects: attacking the causes of poverty rather than its symptoms, preventing poverty through education and training rather than simply compensating people in poverty (DSS 1998), and preventing illness rather than merely curing it (eg DH 1999) The centrality of work hinges around the emphasis on a ‘carrott (eg minimum wage, tax credits) and stick (reducing benefit) approach’ to ‘making work pay’ (see Lister, this issue).
The third way rejects both the inequality of the new right and the equality of outcome which it associates with the old left. The new goal is social inclusion (eg Levitas 1998; Giddens 1998, 2000; see Lister). While Old Labour redistributed money through taxes and benefits, New Labour will redistribute life chances through employment opportunity and lifelong learning. This concentrates on primary rather than secondary redistribution, or asset-based as opposed to fiscal egalitarianism, and seeks to tackle the root causes of poverty and inequality rather than merely compensating people for their poverty.
While New Labour has been criticised for abandoning the pursuit of greater equality of income through the ‘standard mechanism’ of taxes and benefit levels, it has received insufficient credit for its aims of greater equality of outcome in health and education (eg reducing the health gap). It is too soon to evaluate the success of these necessarily long-term objectives, but the implication that inclusion through public services is compatable with some degree of inequality of cash income has parallels with the views of Tawney and Crosland (Powell 1995).
The re-definition of equality is associated with the re-definition of citizenship from ‘dutiless rights’ towards ‘conditional’ or ‘contractarian’ welfare’. The main conditions are connected with work obligations, but may also be found in housing, the behaviour of children and maternity benefit under the Surestart scheme (see Lister). The Queen’s Speech of November 1999 signalled an intention to reduce the level of social security benefit to those who fail to complete their community sentences. All this suggests moves from patterned to process-based distributions: from what you are to what you do. Two people with identical levels of need may be treated differently depending on their actions, with some more deserving than others. In short, Labour wishes to move towards a new contract, deal or bargain between state and citizen (Labour Party 1997; DSS 1998; DH 1999).
The new mixed economy of welfare has two main dimensions. First, there is a greater aceptance of markets. For example, New Labour moved from a rejection to an acceptance of the Conservatives Private Finance Initiative. In addition to the PFI, other public/private partnerships include the Education Action Zones and proposals for the London Underground. More recently, there may be more NHS patients treated in private hospitals. This marks the end of the cold war between Old Labour (as illustrated by Barbara Castle in the 1970s) and the private sector. In some ways, it has more in common with the original wartime Coalition plans for a national health service than with the 1948 Bevan model.
Second, there are moves away from state provision towards a revival of mutual aid and civil society (eg Wright 1996; Blair 1998; Giddens 1998, 2000). Recent speeches by Cabinet Ministers David Blunkett and John Reid argued that there should be less reliance on the state (Sunday Telegraph 4 June; Daily Telegraph, 25 May). It is not reported whether these speeches were slow-handclapped, but similar speeches would have received great applause at Conservative Party Conferences. It has been claimed that Labour is moving towards a ‘DIY’ Welfare State (Grice 1997: see Klein and Millar 1995) in which people take greater responsibility – and risk- in piecing together their own package of welfare from a variety of state, private and voluntary sources.
New Labour proposes partnership and co-operation instead of hierachical command-and-control or competition. However, some policies in sectors such as health and education appear to, despite the rhetoric, emphasise command and control and centralisation with central and local institutions of inspection, ‘hit squads’ and taking over ‘failing’ local institutions such as schools (eg see Painter 1999). The recent NHS Plan proposed a system of ‘earned autonomy’ . This entails a ‘traffic light’ scheme where ‘green’ organisations can speed along the motorway like Jack Straw’s driver, while ‘red’ organisations are subject to ‘zero tolerance’ policing. This may be necessary and desirable, but it is not ‘partnership’.
New Labour claims to have broken the party’s ‘tax and spend image’. New Labour will be wise spenders, not big spenders. This appears to have two main elements. First, it contrasts ‘good’ and ‘bad’ spending. ‘Investment’ in services such as education and health is ‘good’. However, part of the social security budget is ‘bad’ – ‘the bills of economic and social failure’. Second, there is a focus on outputs and outcomes rather than on the level of expenditure, or inputs. The Comprehensive Spending Review ties money to reform and modernisation, ensuring that it is well and wisely spent and goes to the front line of services. However, the perception that ‘TB has not delivered on the NHS’ led to a return to the old recipe of the Oliver Twist NHS. TB promised ‘more’ – spending to the EU average- on a television audience over its cornflakes in January. The NHS Plan promises more inputs- expenditure, doctors, nurses and hospitals beds.
The roots of the third way will now be explored. They are complex and diverse, with elements from a variety of times and places. These elements are now examined under the headings of something old, something new, something borrowed and something blue.
Something Old
It can be argued that many of the ingredients of the ‘new welfare state’ are ‘old’ rather than ‘new’. For example, building the welfare state around work – ‘work for those who can; security for those who cannot’ is little more than a more humane version of the ‘less eligibility’ concept of the New Poor Law of 1834. Work incentives were seen as vital by Beveridge. The Beveridge welfare state nominally incorporated notions of the obligations of actively seeking work, which were not rigidly enforced during periods of relatively low levels of unemployment. The ‘New paternalism’ in the US (Mead 1997) and its incorporation into the UK (MacGregor 1999) would be familiar and welcome to the Webbs (cf Marquand 1998). Similarly, the importance of a voluntary and private extension ladder above a state minimum would be familiar to Beveridge (Hewitt and Powell 1998). In some ways, the new welfare state has merely taken some old policies from the shelf, dusted them down and given them a new gloss.
Something New
Giddens (2000, p28) claims that the Old Left cannot exist in New Times. With an emphasis on modernisation, national renewal and a young country, it might be considered that everything associated with New Labour would be ‘new’. Fairclough (2000, p18) claims that the terms ‘new’ and ‘modern/ modernise/ modernisation’ occur 609 and 176 times respectively in 53 speeches by Blair between 1997 and 1999. While the welfare state introduced by Attlee’s Labour Government in the 1940s represented a great modernisation, these institutions have not adapted to the changes of the last 50 years and now require modernisation themselves. According to the Welfare Green Paper (DSS, 1998, Ch 1) the welfare system has failed to keep pace with profound economic, social and political changes.
Globalisation means that governments can no longer ‘tax and spend’ or pursue Keynesian full employment in one country. For New Labour, ‘we are all globalists now’. Just as the economic sphere has changed since Keynes, the social sphere has changed since Beveridge. The machinery of welfare has the air of yesteryear, and has failed to take account of changing work, working women; changing families; an ageing society and rising expectations. The NHS is viewed as a 1940s system operating in a 21st century world. Finally, politicians – rightly or wrongly- believe that the electorate are no longer willing to pay higher taxes to finance growing demands of the welfare state.
However, some of these claims are banal, and others are simply untrue. The NHS has ‘modernised’: new technology has been introduced; many new hospitals were built under the Hospital Plan of the 1960s; midwives have mobile phones. The NHS may not have modernised as fast as systems in other countries or as fast as it should, but an acceleration of change is hardly ‘new’. Universities did not need a ‘plan’ or great celebrations of modernisation when they replaced chalk with marker pens, or communicated with students by e-mail. The realisation that left-centre parties need to attract the middle class is a re-discovery of New Deal/ Great Society alliances in the US (Philpot 1999; Corera 1999) and Attlee’s Old Labour of 1945.
Something Borrowed
The most striking parallels between New Democrats and New Labour may be found in the centrality of work; moves to a more conditional welfare; flexible labour markets and ‘zero tolerance’ on crime and failing schools. contract; tax credits, ‘workfare’ (eg Marquand 1998; Driver and Martell 1998; Corera 1998, 1999; Philpot 1999; Walker 1999; Deacon 2000). It is said that Gordon Brown’s officials joke that the best way to persuade him of a policy’s merit is to tell him ‘it is how they do things in Wisconsin’ (Sunday Telegraph, 4 June).
However, while there are parallels with the USA, it is an oversimplification to regard Labour’s whole welfare programme as an US import. First, New Labour is influenced by policies from other countries such as Australia. Second, while welfare to work is arguably the centrepiece of welfare reform, it is not the whole story for ‘welfare’ (or social security) in the narrow (US) sense, nor for the wider welfare state where services such as the NHS still bear some of the democratic socialist touches of founder Aneurin Bevan. Third, much of recent Republican and Democratic social policy involves devolution from Federal to State level. Arguably, despite the rhetoric, New Labour is concerned with increasing central control.
Nevertheless, it is undeniable that New Labour has borrowed heavily in terms of both style and substance from the New Democrats. Policy borrowing has arrived on a transatlantic Jumbo Jet rather than on Eurostar. Indded, rather than borrowing from Europe, there have been some attempts to export Blairism. On a number of occasions Blair has urged the EU socialist leaders that they must follow the US economic model: but the economic success of America must be combined with social justice. In some ways, Blair wants to lead the European social democrats via his third way to the promised land of the New Democrats in the USA. However, this route is not considered attractive by more traditional socialists such as Lafointaine and Jospin (see Lightfoot 1999; Levy 1999). Navarro (1999) argues that proponents of the third way such as Giddens misrepresent European social democracy: rather than social democracy learning from the third way, the third way should learn from social democracy.
Something Blue
Perhaps the most rehearsed set of arguments suggests that the red flag has mixed with Conservative blue to become a purple thornless rose. There are many policy similarities, notably in the areas of public spending and taxation, workfare, a new mixed economy of welfare that focuses on the market and civil society rather than on the state, toughness on crime and – in spite of the rhetoric- a centralisation of decision making. In some areas, New Labour has gone beyond the Conservatives. For example, the New Deal for the young unemployed arguably has larger sticks than Conservative schemes. The package of ending student grants and the introduction of student tuition fees has risked the middle class wrath that Sir Keith Joseph regarded as not practical politics. The clawbacks on incapacity benefit included in the Welfare Bill which led to another backbench revolt in November 1999 were rejected by Conservative Secretary of State for Social Security, Peter Lilley as too extreme.
On the other hand, some Conservative policies such as the Assisted Places Scheme, tax relief on health insurance and General Practitioner Fund Holding have been abolished. The minimum wage is clearly ‘Old Labour’ and was opposed by the Conservatives. While New Labour have not uprated pensions in line with earnings as advocated by Old Labour in the form of Barbara Castle, they will introduce a Second State Pension to replace the State Earnings Related Pension (SERPS) that the Conservatives attempted to abolish, and eventually diluted. Although the means may not be fully clear, the Conservatives would not have committed themselves to the goal of abolishing child poverty within twenty years, ‘the most radical and far-reaching campaign against poverty since Beveridge’ (White 1999). In short, it is too simple to equate the third way with neo-liberalism (Marquand 1998; Driver and Martell 1998, 2000; Giddens 1998, 2000).
Tensions within the Third Way
It has been suggested that there is no coherent ‘big idea’ behind the third way. Indeed, the big idea is that there is no big idea (Economist 1998; Kay 1998). In contrast to the clarities of the old dichotomies, the third way blurs, being several planks short of an analytical framework (Economist 1998). The third way appears to be an ’emergent strategy’ or in the words of Tony Wright (1996) a practice without a theory. A strength of the third way is that it is based on the idea of collapsing previously irreconciliable opposites, and finding ‘win-win’ situations, such as family-friendly policies being good for business (Corera 1999; cf Levy 1999). Blair (1998, p1) claims that the third way reconciles themes which in the past have wrongly been regarded as antagonistic, such as rights and responsibilities (see Fairclough 2000). This ‘tension at the heart of the third way’ (Corera, 1999, p59) may be creative and productive.
However, it is possible that the third way tries to reconcile ‘real’ as opposed to ‘false’ opposites, like trying to mix oil and water. As Hutton (1999) argues, the New Labour coalition spans soft socialism and liberalism, encompasses big business and moderate unionism and is intellectually championed by the Adam Smith Institute as much as the IPPR. Trying to fashion a coherent philosophy and policy framework that can keep all these interest groups satisfied is impossible. Sooner or later, New Labour will have to make a decision about what it is and, as a result, which parts of its coaltion it is prepared to shed (cf Marquand 1998). In this case, the package of eclectric policies glued together by pragmatism may begin to fall apart. There are two main areas of possible tension (cf Kay 1998). First, there is a possible hiatus between values and policies, or ends and means. New Labour claims that the third way delivers traditional values by flexible means, in the manner of ‘what counts is what works’.
However, repeating that New Labour remains committed to the traditional value of ‘social justice’ does not advance analysis very far. Greater specificity is required, as many people could legitimately claim to be in favour of social justice. The problem is to be clear about exactly how this translates into an operational definition, and which policies then satisfy this objective. Certainly, many pensioners have failed to be convinced by the ‘social justice’ of an extra 75p per week. The translation of traditional values into new policies must show that the traditional policy was failing; identify the reason why it was failing; show that it was not possible to improve the traditional policy through incremental means; and prove that the new policy will show better returns.
Second, there may be some problems of consistency between and within the elements. For example, New Labour claims to favour both responsibility and inclusion. However, the ‘irresponsible’ who ‘break their contract’ – and their families?- must be subject to some sanctions. This is New Labour’s version of the old tension between security and incentives, and the division into the ‘deserving’ and ‘undeserving’ poor that has faced British social policy through Chadwick and Beveridge for the last 150 years.
There are also some possible problems within the dimensions. For example, Labour’s views on accountability and control are unclear (eg Painter 1999). In health and education decentralist ideas such as Health and Education Action Zones coexist with new command-and-control structures of the National Institute for Clinical Excellence (NICE), the Commission for Health Improvement (CHImp), various ‘OF-s’ such as OFSTED, and ‘hit squads’ to take over failing schools and Local Education Authorities. Blair’s (1998, p16) phrase of ‘intervention in inverse proportion to [centrally determined] success’ is a more elegant expression than Alan Milburn’s ‘if they make a mistake, we’ll come down on them like a ton of bricks’, but both imply the Old Labour idea of the ‘gentleman in Whitehall’ knowing best.
Conclusion: Jackdaw Politics?
There is still considerable disagreement about New Labour’s Third Way. One reason for the continuing debate is the search for the third way. As Marquand (1998) and White (1998) point out, there may be a plurality of third ways, ranging from the genuinely social democratic to a leftish one nation Tory or leftish variant of contintental Christian Democracy, with some tensions or paradoxes between the models.
It has been suggested here that any model of the third way may exhibit some tensions or paradoxes. This is because it is a composite model rather than a coherent whole. Searching for the pedigree of the third way is illusory as the third way is a mongrel. ‘Apart from its acceptance of a number of Thatcherite reforms, new Labour’s search for a fresh identity has been global rather than indigenous. It has turned to the American Democrats for lessons on how to win power, the Australian Labour governments of Hawke and Keating on how to retain it, and to the Asia-Pacific for a vision of the future’ (Davey 1998, p78).
New Labour’s policy learning resembles a jackdaw’s search for shiny objects, with pieces from Old Labour and the Conservatives in Britain, Continental Europe, and the USA. The third way is an eclectic and evolving pick and mix rather than a coherent whole; a cafeteria stocked with old and new, domestic and overseas dishes rather than the set meals of right and left. It is not yet clear whether the flavours will blend. The third way lacks clear fits between values and policies, between ends and means, and between and within policy elements.
Some of these may not be of great practical significance. In last analysis, it is not academics but voters that will determine the success of the New Labour project. Many voters are quite happy with policies that are ‘right’ on crime but ‘left’ on the NHS (Gould 1998, pp211, 238). However, there are two main dimensions where this lack of fit is vital. First, at the stage of policy formulation it is clear that tensions between principles have not been reconciled. While many people can see that a stress on both rights and responsibilities is possible, it is more difficult to comprehend for genuine alternatives such as centralisation and devolution.
This is further confused by different messages: some individuals in some policy sectors stress devolution, others in other (and sometimes within the same sector) stress centralisation. The experience in Scotland and Wales showed that New Labour wanted its devolutionary cake while eating according to a centrally prescribed diet sheet. Second, at the stage of policy implementation, there are perceived to be delivery failures. In spite of the stress on pledge cards and the sense of success according to the Government’s Annual Reports, many voters feel that their (perhaps unrealistic) expectations have not been met. For example, NHS waiting lists are down, and the waiting list pledge has roughly been achieved; yet the NHS remains ‘in crisis’.
The jackdaw politics of the third way leaves New Labour adrift in uncharted waters without a political compass. Unlike Old Labour, there is no clear credo or instinct; no political soul. It has neither doctrine nor ethos. Tony Wright has claimed that ‘the perceived theoretical vapidity of new Labour comes at a price. It has, for example, produced a pensions policy that is intellectually impeccable, morally defensible, economically sensible – and politically disasterous.’ He continues that, ‘It has also produced a political style that is often downright embarrassing. We have the sterile verblessness of ministerial speeches delivered without a flicker of original thought or the passion of real argument. This is politics for middle managers’ (Daily Telegraph, 16 June). New Labour now possesses enough shiny objects. It must now decide which it treasures.
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Something Old, Something New, Something Borrowed, Something Blue: the Jackdaw Politics of the Third Way
Abstract
Attempts to position the third way on a left-right continuum- a modernised social democracy as opposed to a modified Conservatism – are difficult. In particular, searching for the pedigree of the third way is illusory as the third way is a mongrel. New Labour’s policy learning resembles a jackdaw’s search for shiny objects. Using examples from welfare reform, the complex roots of the third way are examined in terms of something old, something new, something borrowed and something blue. This results in the third way exhibiting some tensions or paradoxes. More attention will need to be paid to the fit between values and policies, between ends and means, and between and within policy elements if the glue of pragmatism between the elements is not to fall apart..
Something Old, Something New, Something Borrowed, Something Blue: the Jackdaw Politics of the Third Way
Martin Powell
Department of Social and Policy Sciences
University of Bath
Claverton Down
Bath BA2 7AY
Tel: 01225 826826 x 5836
Fax: 01225 826381
E-mail: [email protected]
Martin Powell is a Senior Lecturer in Social Policy at the University of Bath. He has written a number of articles about the ‘third way’ in social policy and has edited ‘New Labour, New Welfare State?’ (Policy Press, 1999). He is the co-ordinator of the ESRC Research Seminar series on ‘New Labour amd the Third Way in Public Services’ and is a co-director of the ECPR workshop on ‘Third Ways in Europe’ in Grenoble, 2001.
