Magazine article The Spectator

How Gordon Brown Has Stamped on New Labour, Tony Blair and the Third Way

Magazine article The Spectator

How Gordon Brown Has Stamped on New Labour, Tony Blair and the Third Way

Article excerpt


There have been three great turning points in the history of postwar Britain. The first came immediately after the end of the war, with the election of Clement Attlee's Labour government of 1945. It nationalised much of British industry, introduced punitive taxation, and established the principle that the state should dominate the individual.

The Attlee paradigm, though modified, was never fundamentally threatened by the Conservative governments that followed from 1951 onwards. It proved immensely resilient in the long years of post-1945 economic decline and was only challenged when this decline turned into collapse in the 1970s.

The emergence of Margaret Thatcher in 1979 was the second great turning point. She reforged the relationship between the individual and the state, and by doing so released a surge of creative energy in the British economy. Gordon Brown's Budget statement on Tuesday was, in a way that he did not intend, a tribute to Margaret Thatcher. He took pleasure in showing how, far from being the sick man of Europe as we were in the 1970s, Britain now outperforms the rest of Europe on every economic measure.

The tragedy of Gordon Brown is that he is unable to perceive the link between the buoyant economy he inherited from the Conservatives and the supply-side reforms that made it possible. Intellectually he is a statist and emotionally a control freak. He genuinely believes that the relative success of the last few years is down to the frenetic meddling in the micro-economy that has become his hallmark as Chancellor, and amid other even more malign consequences - has caused the Tolley's tax guide to swell by 50 per cent.

For five years Gordon Brown has, in short, been quietly unpicking the Thatcher economic settlement by inflicting massive new bureaucracy, complexity and regulation on business. The importance of last Tuesday was that he finally had the courage to renounce the Thatcherite settlement altogether. The autumn of 2001 will be seen by historians as the beginning of a third postwar epoch, the moment when Labour started to roll forward the frontiers of the state.

It is this which made Gordon Brown's speech such a humiliation and a defeat for Tony Blair. For the central premise of New Labour - a political party that can now be spoken of in the past tense - was that it accepted the economic insights of Thatcherism. Tony Blair said many times that the ability of the state to tax its citizens had peaked and that the `age of tax and spend is dead'. The Prime Minister's beloved `Third Way' - about which very little has been heard since the general election - was an admittedly feeble-minded attempt to synthesise free markets and a humane and compassionate public environment. This was what the Prime Minister's campaign for public-sector reform - still being timorously proclaimed at the Labour party conference in October - tried to do.

On Tuesday, Gordon Brown stamped on New Labour, the Third Way and Tony Blair. He ruled out private finance and identified as the way forward public spending funded by massive tax rises. There has been a lively debate in the British political class on whether New Labour was - as Tony Blair repeatedly claimed - a genuinely new party, or simply a cunning device to bring back Old Labour through the back door. Gordon Brown's Budget statement gave a final answer to that question. …

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