Was There a Third Way in New Labour’s Social Exclusion Policy?

The theory of social exclusion became a central component of New Labour’s social policies and their drive for what they viewed as a programme of modernisation.

Tony Blair’s Labour Party’s crushing landslide general election victory over the Conservative Party in 1997, after almost two decades in opposition, was taken as a death knell for two decades of ideological hegemony for the Thatcherite new right; in its place, the “Third Way” was developed as a new form of social democracy.

Drawing from the old left, and the new right, the Third Way attempted to to build consensus politics by retaining the right’s faith in free markets and privatisation, but arguing that they could be used as tools for implementing traditional left goals.

As a key tenet of this, social policy was subject to a complete revamp under New Labour. Gone were the days of Labour Party policy focusing on redistribution and poverty; instead, the impetus of the party was now directed towards the matter of ‘social exclusion’, focusing on employment as a way to reduce social exclusion and alleviate the ills of society.

This changing focus embodied the Third Way’s view that it had fundamentally changed the politics of social democracy; those who endorsed it viewed this as a necessary modernisation of the programme in the face of economic and social shifts on a global scale. The electoral success of Bill Clinton in the United States of America and Tony Blair in Britain, and the subsequent spreading of Third Way politics to other social democratic parties throughout the world to differing extents, helped confirm this. In its incipient stage, it germinated in the USA as a response to repeated election losses for the Democratic Party, leading to a move to the ideological centre ground. This bears a staunch resemblance to the ways in which the Third Way manifested itself in Britain; the Labour Party, after 18 years in the wilderness due to election defeats, gave birth to New Labour. In this sense, it’s worth seeing as something more complex than a “betrayal”, as it was led by a genuine desire to re-invigorate social democracy and revive it as a political force. At the same time, however, it is also important to understand that this was not purely a pragmatic move, but one rooted in ideology. In a move to both distance itself from the Labour Party’s democratic socialist roots, and also to present itself as an alternative to Thatcherism and the new right, the concept of the Third Way was used to position New Labour as neither old left nor new right:

‘The Third Way stands for a modernised social democracy, passionate in its commitment to social justice and the goals of the centre-left, but flexible, innovative and forward-looking in the means to achieve them. It is founded on the values which have guided progressive politics for more than a century—democracy, liberty, justice, mutual obligation and internationalism. But it is a third way because it moves decisively beyond an old left preoccupied by state control, high taxation and producer interests, and a new right treating public investment, and often the very notions of “society” and collective endeavour, as evils to be undone’. Tony Blair

Beyond rejecting the tools of the old left, the Third Way represents a shift towards the centre and away from the left in its conceptual view as well. This can now be plainly seen to have been, at best, misguided, and at worst a complete failure after witnessing the pasokification that Third Way policies have wrought on social democratic parties across Europe, excluding the Labour Party under Jeremy Corbyn’s leadership due to its significant shift to the left.

Furthermore, New Labour’s portrayal of itself as neither old left nor new right is a flawed, almost disingenuous claim—although it is true that they are certainly not the old left, their innovations represented a continuation of the neoliberal policies displayed under the Conservative governments from Thatcher onwards rather than a disconnected modernisation of social democratic positions. Though this doesn’t mean fundamental differences between the Thatcherite new right and the Third Way of New Labour don’t exist—by looking at how New Labour attempted to match traditional social democratic concerns, we see how this often represented an acceptance of right wing tools as part of rejecting left wing tools.

The theory of social exclusion became a central component of New Labour’s social policies and their drive for what they viewed as a programme of modernisation. Surprisingly, social exclusion was not featured in their election campaign, but it rapidly became a keystone of the New Labour welfare reform programme. Whilst holding the reins of power, the dedication shown by New Labour to combating social exclusion was like a rollercoaster; sometimes high, sometimes low, but it was through New Labour that it became such a domineering force in social policy in Britain. New Labour’s social policy agenda was largely centred around the concept of social exclusion as it presented greater scope for a focus on right-wing economics, by providing an avenue for using social justice rhetoric to conceal a pivot away from a politics of redistribution.

What Actually is Social Exclusion?

Unlike other, more established social policy concepts such as class, mobility, and poverty, social exclusion is—by comparison—a fairly new term. Rene Lenoir, whilst he worked as Secretary of State for Social Action in France during the 1970s, used it to describe those in French society who had been ‘excluded’ from the mainstream, those whose fall the safety net of welfare had failed to catch. However, the theory of social exclusion rapidly gained serious traction and was soon on the lips of politicians across Europe and, today, protection against social exclusion is a fundamental component of the European Social Charter.

Ann Taket argues that the concept’s relevance stems from recognising that the inequality caused by social exclusion is a self-replicating process, due to a lack of participation and social mobility for the socially excluded. As Taket explains, ‘social exclusion operates to prevent people from participating in the mainstream activities of society and accessing the standards of living enjoyed by the rest of society’. As a consequence, social exclusion covers a much broader range of issues than just income poverty; it is a way of explaining what can happen when people and communities are met with an amalgamation of issues such as substandard housing, a lack of ‘valuable’ skills, the disintegration of their family, and discrimination. It is therefore the most dramatic outcome of people ‘losing’ the birth lottery and being born into a disadvantaged household, and as this is a problem that is often passed from generation to generation, it can become ever more pronounced as time goes by.

Beyond this, the causes, solutions, and even the fundamental definition of what it means to be socially excluded are heavily contested. The three most prominent positions are a redistributionist discourse (RED), a moral underclass discourse (MUD) and a social integrationist discourse (SID). The redistributionist discourse is mostly focused on poverty and grew out of British critical social policy; it critiques inequality and calls for a mode of citizenship pillared by power and wealth being redistributed. The moral underclass discourse is interested predominantly on the behaviour of the socially excluded, viewing delinquent behaviour as the driving force behind people’s social exclusion. MUD concerns itself with morality and sees social exclusion as an issue that stems from people with criminal intentions; irresponsible young mothers and unemployable young men amongst other things. The social integrationist discourse focuses its primary concern on paid labour, and its proponents believe that social integration can be achieved most proficiently by placing emphasis on treating economic inactivity.

New Labour’s Implementation of Social Exclusion Policy

Unfortunately, in spite of the heavy emphasis placed on social exclusion by New Labour, and the implementation of schemes like Sure Start and bringing in minimum wage legislation, there is very little evidence to support the belief that New Labour actually made any notable strides towards a more inclusive society and country as a whole. The failure of New Labour to veritably manufacture fundamental change in regards to social exclusion is due to a systematic failure of the ideology of the Third Way and the way in which this relates to social exclusion: the tendency of New Labour to conflate social exclusion almost entirely with a lack of participation in the labour market misses the mark, and in doing so becomes the poisoned root, killing the tree of Third Way welfare reform aimed at lessening social exclusion.

Moreover, even the more admirable aspects of the social exclusion agenda can be seen as ambigous due to their structuring by a MUD approach. This is notable with Sure Start and the wider early years agenda. For Andrea Marie, a major component of the initial Sure Start programmes, which were set up in the most deprived 20% of wards, was changing maternal behaviour to ensure that childen were socialised in a way which made them ready for the discipline of school and work, with the National Evaluation of Sure Start arguing that “it is very likely that improvements in home environment, chaos and harsh discipline will deliver future positive benefits in education, worklessness, and offending”.

New Labour therefore, as Marie argues, continued the idea that the need for childcare is grounded, sometimes explicitly and sometimes implicitly, in the idea that working class mothers are “not up to the task”. Though the policy did have some successes, Jo Littler has pointed out that it reflects a political viewpoint with an obsession with “early years provision … because the idea of levelling the playing field at the outset of life, and then letting people suffer at the mercy of marketisation is not only fully compatible with, but is the central tenet of neoliberal meritocracy.”1

As followers of the Third Way ideology, New Labour rightly stood against social exclusion but definitively rejected the left’s conceptual opposition to inequality itself, meaning a shift away from policies that essentially consist of redistribution towards the poor. This shift away from redistributive policies means that although political inclusiveness can work complementarily with RED, New Labour’s social exclusion agenda did not follow RED itself. New Labour’s focus on paid work is consistent with SID, demonstrated by the New Deal and welfare to work policies; however, MUD also rears its ugly head in the discourse shown by New Labour and the Third Way.

Demographic and socioeconomic factors took a back seat to what New Labour viewed as a problem of attitude in those who were welfare dependent and out of work. This comes dangerously close to perpetuating the moral underclass discourse of a deserving and undeserving poor; the way New Labour attempted to justify benefit cuts links closely with this, and their Social Exclusion Unit itself perpetuates this by focusing on social order as a means of controlling social exclusion. Overall, though, New Labour seemed to most closely follow SID, with the presentation of inclusion as a duty and not a fundamental right, through the idea of employment being something that the individual must achieve on their own rather than something the state has to provide. Gordon Brown’s focus on work ethic as a cornerstone of the welfare system further demonstrates this shift away from RED and towards SID by New Labour, as does the increased use of terms such as fairness at the expense of terms like equality.

After moving away from politics of redistribution, New Labour subsequently proposed two programmes designed to tackle social exclusion: the New Deal, and the formation of the Social Exclusion Unit. The New Deal’s welfare to work programme was composed out of a desire to reduce the amount of money being spent on social security, whilst the SEU attempted to deal with social order. This new proposition of employment as the only road that could lead to an escape from poverty diminished the support available to the economically inactive, and largely ignored wide-scale in-work poverty.

New Labour identified social exclusion as the key target for its social policy programme and viewed employment as the most apt medicine to treat it, reflecting the need to give citizens the independence to escape exclusion. This led to the construction of a view of citizens as autonomous and individualistic, showing echoes of Thatcherism and the new right, but also allowed people to have a high expectation of state-run services as long as they, themselves, are responsible and industrious.

These ideas all sound relatively attractive in theory, but the culmination of this leads to public services being judged solely on how they respond to the needs of citizens as consumers. Compounding this, New Labour and the Third Way’s focus on paid labour as a marker of social inclusion can, and has, led to further exclusion of women—especially mothers—on a gendered basis. Women are often excluded from employment due to their gender, yet New Labour’s focus on paid labour misses the mark in dealing with this as women are, due to the patriarchal nature of current capitalist society, statistically those most likely to be carrying out unpaid domestic labour, or taking on the role of the stay-at-home-parent, or raising a child on their own. By centring inclusion in the workforce as a method to combat social exclusion, New Labour fundamentally failed to respond to this, or responded to it by, through a mixture of benefit cuts and childcare provision, forcing mothers of younger children back into the workforce.

Although New Labour’s social policies did have some successes in the area of social exclusion, such as the decrease in the number of individuals who were financially excluded from society due to not having a bank account, the overall story of their time in power is one of failure in regards to social exclusion. In 1999, the government’s own Policy Action Team noted home contents insurance as a fundamental component of financial-based social exclusion. However, in 2006—just a year before Tony Blair left office—the gap in home contents insurance for the poorest fifth and the average was still large and relatively unmoved compared with the early 1990. Another failure—perhaps the most damning due to New Labour and the Third Way’s focus on employment as a fix for social exclusion—is that while unemployment was reduced under their governance, the number of economically inactive individuals who wanted work fell by as little as a tenth, and the proportion of disabled people who were undertaking paid employment had barely increased at all.


Whilst it is not reasonable to expect any government to entirely eradicate social exclusion in such a short time, it is fair to suggest that New Labour’s approach resulted in failure and could have benefitted from an entirely different method. It treated the neoliberal market as a tool, rather than an ideology and set of social priorities that could actively increase social exclusion as much as it could be used to diminish it.

Although the historical examples for this are limited, when we look towards the states that once made up the Soviet Union, we can see a sharp rise in social exclusion levels following the transition from a state planned economy to a market based one. To this end, it is reasonable to suggest that a move towards a state-planned economy could go some way to reducing the effect and actuality of social exclusion by focusing on redistributive politics, alongside a management of the ills that make social exclusion a self-reinforcing machine such as poverty and gendered discrimination.

Coupled with this, inclusive diversity is another way in which a reduction in social exclusion is possible; by admitting that social homogeneity in this current age is impractical, we understand that diversity is a feature of all communities and is not an inherent weakness of any form. Inclusive diversity helps to encourage people to work together regardless of their differences, whilst recognising that some may need more help to achieve their goals than others. It also notes that there will, at times, be a need for state intervention to foster social inclusion where it is not naturally occurring—New Labour’s continuation of the Thatcherite emphasis on individuality and autonomy is entirely at odds with this as it does not foster the culture of cooperation that is required.

This policy of inclusive diversity has the potential to entirely dismantle social exclusion and whilst, as yet, no country in the world has managed to do so, we can see great strides being made in the state-planned Marxist country of Cuba. Despite the country being under crippling sanctions and struggling with the poverty inflicted by this, its low levels of social exclusion should act as a ray of hope for us all. Through inclusive diversity, social exclusion can be eradicated by carefully distributing resources—as Marx and Engels once said: ‘from each according their ability, to each according to their need’.

  1. Jo Littler, “More for the Many, Less for the Few”, in The Corbyn Effect, (London: Lawrence and Wishart, 2017), p. 209