Welfare Reform and Coalition Politics in the Age of Austerity

Abstract

Welfare reform was at the heart of New Labour politics in the 1990s. It was also a significant aspect of David Cameron’s bid for electoral success after 2005. The Liberal Democrats too made reform of the tax and benefit system, in particular for those on low incomes, part of their political pitch on the liberal left. Welfare reform was — and still is — unfinished business for British politics and policy-making. Despite a strong economic performance under the Labour Government after 1997, which saw near full employment, underlying rates of economic inactivity remained stuck at around one fifth of the working-age population. The recession that hit Britain in 2008 heaped unemployment on these already high levels of ‘welfare dependency’. If welfare reform proved tough-going in an era of ‘non-inflationary consistent expansion’, it will be even harder in the ‘age of austerity’. So, where is the Conservative-Liberal Democrat Coalition taking welfare reform? Are we seeing a break with previous Labour policies or more of the same? Where do the Coalition’s policies stand from a more international and comparative perspective? And does the Coalition Government offer the chance to establish the long-term settlement that welfare in the UK so desperately needs?