New Labour’s Welfare Reforms: The New Deals

Abstract

In recent years, but notably during the Thatcher era, government spending on welfare benefits increased significantly, while at the same time the social insurance system was being progressively undermined.¹ As a result, questions of affordability and cost dominated public debate in the period leading up to the 1997 general election. In an effort to avoid a repeat performance of its defeat in 1992, Labour sought to cast off its image as the ‘tax and spend’ party and targeted its appeal at middle-class voters. After emphasizing the ‘costs of economic failure and the limits of taxpayer tolerance’, New Labour pledged to radically reform the welfare state and to move away from ‘passive support for jobless claimants towards active efforts to improve their chances of securing employment within a more prudently managed and stable economy’ (Purdy, 2000, p. 185). This approach was epitomized by the New Deals, which are the focus of the present chapter.