A pamphlet examining the concept of stakeholding, its impact on the Labour Party and how it influenced new Labour in Government.
Excerpt
The concept of stakeholding was introduced by Tony Blair in a speech to the Singapore Business Community in January 1996. Blair, then leader of the Labour Party in Opposition, used it as an attempt to show that the party had a ‘big idea’. The idea had been brought to the attention of Blair by his close personal advisers, and had been considered in works such as those by Hutton (1195), Kay (1995) and Handy (1988,1995). It was intended to illustrate that Labour’s intellectual confidence had been rekindled subsequent to the impact of Thatcherism. It was argued that stakeholding was a means by which Britain’s social and economic systems could be made more inclusive. It appeared to offer an escape route from Britain’s problems such as rising crime, the development of an underclass and a poor economic performance. The claim was that ethically-minded companies which considered the wider social environment would be more economically productive then those that did not follow such a path. Stakeholding combined the rights of individuals with the claim that communities were necessary and desirable. In reaction against the Thatcherite agenda, stakeholding could be employed as the ideological framework for Labour’s policies, providing them with an intellectual justification. The successful advocacy of stakeholding was also intended to create a momentum behind Blair as a prospective Prime Minister, in control of his party and guided by a coherent set of ideas. For many years the perceived problem with the Labour Party, arguably created by Harold Wilson when Prime Minister and cemented by the economic confusions of the mid-1970s, was the impression that it did not stand for anything. The gradual repealing of unpopular policies, the creation of a media-centred approach and the Policy Review under Neil Kinnock, gave credence to the idea that Labour would do anything to achieve power. Stakeholding would provide Labour with a distinct agenda. For the modernisers within the party having a coherent thrust to policy would move the party on from the period of ‘consolidation’ under John Smith.
Advocates of stakeholding viewed it as a new form of capitalism. One which moved beyond the failing models presently followed to create an inclusive social and political environment. This element of ‘trust’ was recognised even by arch-market advocates as being an important element of economic success (see Fukuyama, 1995). Yet, such a move would not be a large step away from current institutional arrangements. It would entail reform through legislation or encouragement. Therefore, economic and political success could be achieved while maintaining a market-based system.
This paper describes the development of the theory of stakeholding, relating it to a synthesis of the versions of capitalism upon which it is founded. The strengths and weaknesses of each of these is expressed before the New Labour version of stakeholding is described. It assesses New Labour’s commitment to stakeholding via an examination of the party’s policy document ‘New Labour, New Life for Britain’ (1996). Finally, the paper examines the impact of stakeholding now that New Labour are in government.
Aberdeen Studies in Politics, No 2, Department of Politics and International Relations, University of Aberdeen Working Papers Series