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New Labour Was Lucky, Then the Luck Ran Out

Gordon Brown is out and David Cameron is in. Most Britons, no matter how they voted last week, will be relieved at that. The Labour Party, which won smashing victories in 1997 and 2001, and a convincing one in 2005, had lost all credibility with the British public. The only thing still working in Labour’s favor was the public’s fear of the unknown. But in the end, that could not overcome the brutal fact that Labour came into power proclaiming that it would bring an end to Britain’s boom and bust cycle, and left with Britain on the verge of national bankruptcy.

And since he was personally responsible for Britain’s finances during Labour’s first decade, that failure will be Brown’s epitaph. His volcanic temper, his dour scowl, and his inability to charm may have triggered his downfall, but they did not cause it. He rose to power on the legend of his economic competence, and when that legend turned out to be a myth, he was destroyed by it.

What looked like Labour’s skill turned out to be only their luck. It is a wonderful thing to be lucky, and all governments that win elections get some breaks. The only problem with relying on luck is that, sooner or later, it runs out. And that, looking back, sums up much of New Labour’s time in power. For New Labour was really an extraordinarily lucky party, and Brown, for much of his time near the top, an extraordinarily lucky man.

When Tony Blair refashioned the Labour Party in the mid-1990s, he showed genuine leadership. But he took the lead in uniquely propitious times, and when he won in 1997, everything was set up for success. Like Bill Clinton in 1992, he benefited from the fact that the economy was recovering strongly, and that the outgoing Conservative government had held spending down. That gave him high growth, a strong financial position, and rising employment. Blair could position Labour as the party of fiscal responsibility and yet still spend more. While it lasted, it was the best of both worlds, and Brown took full, dangerous advantage of his lucky break.

Internationally, too, Labour was lucky. The Cold War was over, and – with the exception of the Balkans, where again Blair showed real leadership – most of the world was at peace. Blair could call for closer cooperation with Europe, for good relations with the United States, for wider international engagement and support for the U.N., and for resistance to dictators and human rights abusers abroad, but – until 9/11 – Labour did not have to confront the contradictions between these ideals. Labour had the luck of being able to stand for everything and having to pay the price for almost nothing.

And Labour was lucky at home. Now that the Conservative Party is back in power, it is easy to forget just how crushing the defeats of 1997 and, especially, 2001 were. Serious commentators then wondered if the Party would ever recover, if Britain was on the verge of becoming a one-party state. That was never likely, but Labour was still very fortunate to face such a weak, internally divided opposition. True, Blair, with his uncanny ability to stand for almost all things to all men, helped to divide the opposition.

But he was only able to pull that act off because, at home and abroad, there was nothing that forced him to take decisive, controversial decisions. And with the opposition in tatters, his errors went unexploited and almost unexposed. In retrospect, the most damaging of these was Labour’s deliberate failure to control Britain’s borders and its multicultural appeasement of domestic Islamism. That was very much in line with New Labour’s vision, which was always elitist and at odds with Labour’s working class roots, but it was a failure that, with a different opposition, would have cost Labour dearly.

Blair’s downfall began when, in response to 9/11, he had to start taking real decisions about Britain’s foreign policy priorities. In the end, those decisions, precisely because they were brave, so undermined his position at home that in 2007 he was replaced by Brown. But by then, the rot had set in on the financial front as well.

There had always been a contradiction between Brown’s pose as the exemplar of fiscal responsibility and his practice of spending ever more money. During the last three years of Labour’s time in power, that contradiction was exposed with cruel clarity. Ultimately, Brown’s support collapsed when it became clear that the fiscal luck he had been living on since 1997 had finally ran out.

David Cameron, in contrast to Labour, enters Number 10 showing nothing like Labour’s 1997 luck. He could – indeed, he should – have done a bit better in the election, and if he had, the coalition with the Liberal Democrats would not be necessary. Britain is not at peace: it is fighting a difficult but necessary war in Afghanistan. It is not prosperous: it is deeply in debt. And while Labour is discredited, it will not necessarily break into the internecine warfare that disabled the Tories for a decade. Cameron will need all the luck he can muster, but unlike New Labour, he will not be able to coast for a decade on luck. He will need something more. He will need skill.

Ted Bromund, Ph.D. is Margaret Thatcher Senior Research Fellow at The Heritage Foundation.

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Ted R. Bromund, Ph.D. is a Senior Research Fellow in Anglo-American Relations at the Heritage Foundation.