Sunday, July 25, 2004
Tony's 10-year revolution
Posted by David Smith at 08:59 AM
Category: David Smith's other articles

When, 10 years ago last week, Tony Blair became leader of the Labour party, he was nothing if not ambitious.

“We can change the course of history and build a new, confident land of opportunity in a new and changing world,” he said in his acceptance speech. Building “a young country” was to become his big theme in the following years, as his new Labour party swept to power against a tired old Conservative party.

Ten years on, Blair’s transformation of British politics remains staggering. When he first became an MP, in 1983, few would have bet much on Labour being a force at all early in the 21st century, let alone dominating it.

The Social Democratic party had just split off, taking moderate left-of-centre voters with it. Labour needed what he described then as “middle-ground” voters but had policies that could have been designed to deter them, appealing only to the hard left and an apparently fast-shrinking working-class. A reasonable long-term prediction at that time might have seen the Tories remaining the dominant party with the SDP, in association with the Liberals, replacing Labour in second place.

Even when Blair took over, Labour’s revival was far from guaranteed. John Major had won the 1992 election against the odds, securing victory with a record 14m votes (2.5m more than Labour) in spite of the favourable circumstances, for the opposition, of an economy in recession.

The death of John Smith in 1994, while opening the way for Blair, was seen at the time as further evidence of Labour’s wretched luck. A popular leader, who was successfully exploiting Tory divisions and unpopularity — and who had ministerial experience from the 1970s — was replaced by a fresh-faced but untried youngster.

So Blair’s transformation of the political landscape was not preordained, and is all the more remarkable for that. Ten years after he became leader, and seven after he became prime minister, new Labour has become the natural party of government, with the same questions being asked about the long-term survival of the Tories as were being asked about “old” Labour two decades ago.

As Diane Abbott, the Labour MP, put it last week, Blair’s success has been based on destroying two political parties — the traditional Labour party and the Tories.

Part of that was achieved by luring “Mondeo man”, the archetypal Midlands’ floating voter. David Willetts, 52, a former insurance company accounts manager from Erdington, Birmingham, was one such voter. “I had always voted Conservative until the 1997 election when I voted for Blair,” he says. “I’ve actually been very impressed with Labour all the way, and Tony has kept the same commitment he’s always had. “He’s come under a lot of criticism, but I can’t think how the Tories could have done any better.”

Blair has undoubtedly changed the political landscape. But has he created a new and “confident land of opportunity”. Is his “young country” much different from the nation that saw him take his first uncertain steps as Labour leader?

In some respects, the answer is undoubtedly yes. In 1994 Britain was a nervous country nursing an economic inferiority complex. The humiliation of the exit from the exchange-rate mechanism of the European Monetary System in September 1992, when interest rates had been jacked up to 15%, was still fresh in the mind. The Tories had contrived to have two budgets in 1993 and had raised taxes in both of them.

The middle classes, meanwhile, were being battered by falling house prices and rampant negative equity. Small businesses, many owned by core Tory supporters, had been given a battering.

In fact, while few voters were aware of it, the economy had been quietly recovering for two years when Blair took over as Labour leader, and was to continue recovering for the three years running up to the 1997 general election. But Tory disarray meant that as a government it got no credit for this.

The economy in 2004 is barely recognisable from 10 years ago. House prices have virtually trebled, the average climbing from just over £52,000 to more than £151,000. Unemployment, meanwhile, has moved in exactly the opposite direction, dropping from 2.6m to 840,000, or less than 3% of the workforce — a level consistent with “full” employment.

As far as the economy is concerned, Blair’s confident land has been achieved. In those 10 years every other leading economy has succumbed to recession, in some cases more than once. Britain has sailed on, first under the Tories and then under Labour. The inferiority complex has gone although some of the worry, that it could all end in tears if house prices crash or consumers have overburdened themselves with debt, has not gone away. Rising prosperity is also tempered by anxiety, not just about terrorism but also crime and anti- social behaviour. Violent crime is three times what it was. The old theory, that crime and unemployment were intimately related, has been disproved.

Has Britain become a more equal society? No. The rich, by and large, have got richer. Inequality has grown since 1994 and, albeit much more slowly, since 1997, despite the minimum wage and Gordon Brown’s array of tax credits. But there is a caveat.

“Labour’s tax and benefit policies have reduced inequality compared to what it would otherwise have been,” says Andrew Leicester of the Institute for Fiscal Studies, co-author of a recent study. “Had it not introduced them inequalities would have risen further.”

Educational inequality is, if anything, more pronounced. The number of pupils in independent schools has risen from 466,000 to 508,000 over the past decade.

Blair, according to a popular version of his success story, tapped into a yearning among voters for a re-emphasis on “society” apparently rejected by Margaret Thatcher. The selfishness of the 1980s had given way to the caring society of the 1990s. Labour’s leader was perfectly placed to tap into this zeitgeist, with his talk of a third way between the extremes of Thatcherism and old-style socialism and with his stress on community values. But attitudes may have changed less than is believed.

“I don’t think for a minute that new Labour has turned us into a Scandinavian-style social democracy,” says Philip Collins, director of the Social Market Foundation. “People really don’t care who provides the service as long as they get that service.”

In other respects the Britain of 2004 is different. Both Blair and Major, his predecessor, aimed to put Britain at the heart of Europe and to turn the rising tide of Euroscepticism. Instead, the UK Independence Party marked his anniversary by taking a record share of the vote in last month’s European parliament elections.

Blair, according to Vernon Bogdanor, professor of government at Oxford University, missed his opportunity to push Britain closer to Europe by failing to hold a referendum on the single currency as soon as he became prime minister. But he has, he says, been radical in other areas.

“A Rip Van Winkle who had fallen asleep a decade ago wouldn’t recognise the constitution now,” he says.

But Collins argues that constitutional reform, on the face of it where most has changed in the past 10 years, has also been much more modest than many hoped.

“Devolution has only been a partial success, mayors never really got going apart from London and regional government is just bumbling along,” he says. “Electoral reform got nowhere. If you compare what’s happened with what Charter 88 or Lord Jenkins wanted it has been disappointing.”

Maybe these things take time, which is why Blair hinted last week that he wants to see his new five-year plans for the public services through to the end. His recent initiatives on education and crime suggest the government has barely got beyond first base when it comes to public service reform.

Not only that but his 10 years as Labour leader still come short of the 15 years and nine months Thatcher did at the helm, more than 11 years of which were as prime minister.

Perhaps, too, there is another motivation for staying longer. The most visible change compared with a decade ago is in the economy, with low inflation, interest rates and unemployment and what appears a permanently higher level of confidence.

Blair does not want his place in history to be based solely on the record of his chancellor.


In 1994 Labour had 271 MPs; now it has 407. But Labour’s opinion poll rating, 55% after Blair’s election as leader, has slipped to around 35%.

Taxes have gone up, from 32.8% of gross domestic product to 35.7%, equivalent to more than £30 billion a year in extra taxation. But interest rates have fallen, from 5.25% to 4.5%.

The average house price has nearly trebled, from £52,121 to £151,524. Household debt has climbed from £422 billion to £993 billion. Unemployment is down from 2.6m to 0.84m.

Foreign holidays are up from 27m to 40m, despite a 40% rise in the average cost. Violent crime is up from 311,000 to 1.1m offences, average alcohol consumption from 10 to 12.1 units a week.

From The Sunday Times, July 25 2004