While there will doubtless be plenty of discussion of Blair’s contribution on his departure, it might be more useful to take a step further back and re-evaluate Thatcher. When Blair took office, he was generally seen as offering Thatcherism with a human face. Thatcher herself was generally seen,as a successful (counter-) revolutionary and aspirants to the Tory leadership were still competing for her mantle.
Ten years later, the picture is quite different, superficially at least. Brown seems much more Old Labour than Blair, and Cameron is eager to be seen as anything but Thatcherite.
That’s not to say Thatcherism is politically defunct. Most of the changes implemented by Thatcher (at least up to the time of the poll tax fiasco) remain in place. The big public utilities remain privatised, unions have never really recovered, the rich are a lot richer and so on. Still her term in office now seems to be thought of by both sides of politics, not as a a turning point, but as a period of unpleasant, though probably necessary, shock therapy, best passed over in silence.
Privatisation is a prime example. As it’s turned out, the difference between a commercially sensible public monopoly and a well-regulated private monopoly is so modest as to suggest that this should never have been the central ideological battleground it seemed to be for most of the 20th century. While I think there’s a good case for renationalisation in a number of industries, it will clearly take a Railtrack-scale fiasco for this to happen. On the other hand, interest in further privatisation has waned drastically, and the problems of PFI/PPP schemes seem to be ever more widely appreciated.
In other respects, though, the battle over the size and role of the state seems to have gone fairly conclusively to the social democrats. The central institutions of the social-democratic settlement, such as the NHS, public education, and redistributive transfer payments are not only still in place but are growing in importance. It seems far more likely that the US will implement socialized medicine (at least in the form of universal public insurance) than that the UK will abandon it.
All of this is a view from a long way off. My view is based on the refracted versions of Thatcherism that reached Oceania, and were implemented by Labo(u)r governments in the 1980s and 1990s. In some respects, this was a necessary response to the times. Demands on the postwar welfare state had outrun state capacity, and a combination of retrenchment and refurbishment was inevitable. Since the political right was correctly pointing this out at a time when the left was still recovering from the impossibilist fantasies of the 1960s, it was probably inevitable that the adjustment would come with some of the ideological baggage of Thatcherism.