After New Labour: political and policy consequences of welfare state reforms in the United Kingdom and Australia

ABSTRACT

Growing global integration, combined with the collapse of Soviet Communism, created major challenges for centre-left politics in the democratic world. This article considers two transformative Labour Party-led experiments that refurbished the welfare states of Australia and the United Kingdom, respectively. In Australia, this includes the Hawke–Keating (1983–1996) and Rudd–Gillard (2007–2013) Governments, and in the United Kingdom, the ‘New Labour’ Blair–Brown Governments (1997–2010). We present a comparative political economy of these welfare reforms, one that draws on both the policy transfer and policy diffusion literatures. By the 1980s, both parties faced three problems related to national economic decline, the ideological challenge to Keynesianism, and the decline of the traditional working-class electorate. We argue both parties developed common electoral and governing strategies aimed at winning support for a market-driven social-democratic program. Policy simultaneously compensated voters for market inequalities and deepened market relations. Focusing on how labour governments managed post-industrial change, responded to inequalities, advanced quasi-markets, and negotiated with union partners, we argue these experiments produced increasingly contradictory results that left both parties electorally and ideologically depleted. Despite important similarities, we note differences – starting points, discrete events and institutional variations have mattered to reform paths and their consequences.

KEYWORDS:

• Welfare state
• social democracy
• workfare
• labour parties
• inequality
• social policy
• United Kingdom
• Australia
• neoliberalism

Acknowledgements

The authors would like to acknowledge very helpful and detailed comments from an anonymous reviewer, comments from participants in a workshop organised by Rob Manwaring in February 2015, and feedback from participants in a session at the Australian Political Studies Conference, 2015, at the University of Canberra.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Shaun Wilson is Senior Lecturer in the Department of Sociology at Macquarie University. He teaches and researches in social policy, political sociology, social survey research and the sociology of work.

Ben Spies-Butcher is Senior Lecturer in the Department of Sociology at Macquarie University. His work focuses on the political economy of the welfare state.

Notes

1. By ‘political economy’ of welfare, we mean a welfare approach focused on the interactions between a market economy, social policy institutions and the political system, similar to what Ebbinghaus and Manow identify as ‘comparative political economy’. This approach contrasts with a more technical ‘social policy’ approach which tends to treat welfare as self-contained items of expenditure and services, which is more closely tied to more traditional disciplinary studies (Ebbinghaus and Manow 2001, xiii). We do follow the conventional welfare-state distinction that identifies education policy as separate from social policy; accordingly, we do not discuss the education policies of these labour governments.

2. The concept ‘centre’ here is intended to mean several things simultaneously. First, large numbers of voters consider themselves centrist in Australia and the United Kingdom, labour ‘appeals to the centre’ involve pragmatic politics and policy aimed at vote maximising. Second, it refers to ‘radical centre’ politics of New Labour politics (Giddens 2008) that is also ‘beyond left and right’ (Manne 2008) – in other words, the creative blend of social-democratic, conservative, and market thinking to craft policy and governing techniques.

3. Indeed, other paths in the UK case might have been explored. For instance, similar pressures led the Socialist Party-led Mitterrand government in France to accommodate to economic orthodoxies after 1984 but that administration nonetheless undertook major welfare-state expansion (Evans and Sewell 2013, 53–54).

4. Gingrich and Hausermann’s (2015) data for the English-speaking welfare states does not include Australia or New Zealand.

5. A YouGov poll in August 2015 found that 58% of UK respondents supported ‘renationalising the railways, water companies and other utilities’ (see https://yougov.co.uk/news/2015/08/06/support-radical-left-and-right/).