Nine Years of New Labour: Neoliberalism and Workers’ Rights

DOIhttp://doi.org/10.1111/j.1467-8543.2006.00506.x
Published date01 September 2006
Date01 September 2006
AuthorPaul Smith,Gary Morton
British Journal of Industrial Relations
44:3 September 2006 0007– 1080 pp. 401– 420
© Blackwell Publishing Ltd/London School of Economics 2006. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
Blackwell Publishing Ltd.Oxford, UKBJIRBritish Journal of Industrial Relations0007-1080Blackwell Publishing Ltd/London School of Economics 2006September 2006443401420Articles
Nine Years of New LabourBritish Journal of Industrial Relations
Paul Smith is at the Centre for Industrial Relations, Keele University; Gary Morton is a barrister
at 7 New Square Chambers.
Nine Years of New Labour: Neoliberalism
and Workers’ Rights
Paul Smith and Gary Morton
Abstract
Since it was first elected in 1997, a large Commons majority won in three general
elections and a benign economic environment have combined to give New
Labour the authority and opportunity to implement its programme for industrial
relations and employment law. This paper offers an appraisal of New Labour’s
neoliberalism, and its relevance for understanding the scope and limits of its
reform of employment law. The conclusion calls for a campaign to restore and
extend trade union rights as a prerequisite for safeguarding workers’ interests
within the labour market, employment relationship and society.
1. Introduction
New Labour has been in government for nine years. Elected in 1997, a large
Commons majority won in three general elections and a benign economic
environment have combined to give New Labour the authority and opportu-
nity to implement its programme for industrial relations and employment law.
The only imperative has been the necessity, as required by treaty obligations,
to transpose directives of the European Community (EC) and to take account
of the judgment of the European Court of Human Rights in the
Wilson and
Palmer
case. Even here an area of discretion has revealed New Labour’s
values.
Three major statutes — the Employment Relations Act (ERA) 1999, the
Employment Act (EA) 2002 and the ERA 2004 — and over forty statutory
instruments have been enacted. The result constitutes a major reordering of
employment law. A pattern is now obvious. This paper offers an appraisal
of New Labour’s neoliberalism, and its relevance for understanding the
scope and limits of its reform of employment law. The conclusion calls for a
campaign to restore and extend trade union rights as a prerequisite for
402
British Journal of Industrial Relations
© Blackwell Publishing Ltd/London School of Economics 2006.
safeguarding workers’ interests within the labour market, employment rela-
tionship and society.
2. New Labour’s neoliberal paradigm
The neoliberal project of Conservative governments, from 1979 to 1997,
embodied an express commitment to market exchange as the basis of socio-
economic policy: privatization and market proxies in the public sector and
the ‘rolling back of regulatory frameworks designed to protect labour’ (Har-
vey 2003: 148) were the logical consequences. A wide-ranging programme of
employment law reform included the restriction and regulation of trade union
tort immunity in trade disputes, the imposition of a statutory template for
union government, the removal of statutory support for collective bargaining,
and the dilution of employment protection (Dickens and Hall 1995; Smith
and Morton 2001a; Wedderburn 1991a). This represented a successful and
historic break (distinguishing it from the failed Industrial Relations Act 1971
and emergency legislation in wartime) from the autonomy and liberties
accorded to trade unions by the Trade Disputes Act 1906 and re-established
in the Trade Union and Labour Relations Act 1974 and Trade Union and
Labour Relations (Amendment) Act 1976.
The New Labour government of 1997 explicitly adopted much of the
neoliberal inheritance bequeathed by the outgoing Conservative government
(Buckler and Dolowitz 2000; Crouch 2001; Hall, S. 2003, Hay 1999, Leys
2001). Hall has argued that New Labour
is
distinct from previous Conserva-
tive governments in that it is a ‘
hybrid
regime’ (Hall 2003: 19), a ‘
social-
democratic variant of neo-liberalism
’ (
ibid
.: 22). Its social-democratic heritage
is subordinate to neoliberalism but remains evident in two ways. First, New
Labour ‘has adapted the fundamental neo-liberal programme to suit its con-
ditions of governance — that of a social democratic government trying to
govern in a neo-liberal direction while maintaining its traditional working-
class and public-sector middle-class support, with all the compromises and
confusions that entails’ (
ibid
.: 14). Second, the market-state can incur high
social costs and erode consent, whereas New Labour seeks ‘to win enough
consent as it goes, and to build subordinate demands back into its dominant
logic’ (
ibid
.: 20).
Although a number of commentators have remarked upon neoliberal ele-
ments in New Labour’s industrial relations and employment law policy, often
these have been seen as discrete concessions rather than the result of a deeper
commitment. Neoliberalism is embedded within New Labour’s view of the
labour market and the discourse of the ‘third way’ — a modernized unitary
perspective (Fox 1966: 3) in which ‘New Labour re-legitimized collectivism
but on one central condition: that it be imbricated with management objec-
tives’ (McIlroy 1998: 543).
1
One of the central themes of the third way is
‘partnership’. Collins (2001, 2002, 2003) has argued that partnership is a
metaphor ‘invoked in order to express the highly cooperative ideal expressed

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