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Social Policy Essays – New Deal Policy

Labour’s New Deal policy is a strategy to assist many people to obtain vocational skills and find employment.

Following an overview of British Welfare Ideology history, the specific attributes of the New Deal policy will be critically reviewed with illustration of how the policy typifies New Labour Welfare Ideology.

A. Welfare Ideologies of the Past – A brief overview.

(a) The Elizabethan Poor Law

The legal relief of poverty was first introduced after the demise of compulsory charity that followed the reformation. There were initial parish registers of the poor in 1552 and compulsory fund raising, through to 1601 with the advent of the Elizabethan Poor Law (43 Eliz I Cap. 2). This law oversaw the levying of taxes for the distribution of money and food to the poor but there was a heavy emphasis on hierarchy and charity as the premise for relief. The notion of a long term solution would have affected the fabric of social distinction, and as class was integral to the ideology of the time, long term solutions for the poor beyond ‘handouts’ were never conceived of. Despite this, the system was humane as the homeless and infirm were provided with ‘indoor relief’ in custom built accommodations and the ‘outdoor relief’ was made available to those in their own homes. This ideology continued throughout a number of adaptations to the act, which included the Settlement Act 1662, the Gilbert’s Act 1782 and the Speenhamland System of 1795.

(b) From 1834 to the Welfare State – a changing Britain

The Poor Law Amendment Act 1834 introduced a centralised system of administration of funds and benefits for the poor, and, more notoriously, the workhouse. It was the ideology of the new law that no relief would be made available to those not living inside these workhouses (Poor Law Amendment Act 1834, XXVI). However, the face of Britain was changing and more and more reforms were being brought in to improve the state of public health and education. By the beginning of the 20th century, the Liberal Democrats had set in motion the foundations of the modern welfare state with new laws that were outside the poor law. These included free school meals under the Education Act 1907 and the National Insurance Act 1911. Piecemeal external poor law Acts, designed to deal with specific issues, eventually led to the outright abolition of the Poor Law in 1948 with the National Assistance Act. The concept for this law was for the state to assist all needy UK nationals from the ‘Cradle to the Grave’ but the sheer cost implications and the rise in numbers of the long term unemployed meant that the New Labour Government of 1997 was faced with a deficit of funds for a dwindling welfare system. When New Labour came to power, there were nearly 2 million unemployed and. In order to rectify this, the Party melded together the 20th century ideology of bettering ones self with the original nurture concepts of post war Britain.

B. The New Labour Solution of New Deal – A Critical Review

1. An explanation of the New Deal Policy

(a) What is New Deal and how does it work?

The New Deal policy has two main characteristics. In the first place, it is a ‘Welfare to Work’ strategy (Department of Employment and Pensions, 2004, at p 1). This therefore means that the policy is to assist individuals, who are on benefits, to make the transition from a dependency on the State to independency through work. The second part of this scheme is also to tie in training with employment in order to achieve long term employment and progression within a chosen industry. Further to this, unlike the ‘Skill Seekers’ scheme of the Conservative Party, New Deal is aimed at assisting individuals in all age groups and not just school leavers (Department of Employment and Pensions, 2004, at p 1).

(b) Has the New Deal Policy been successful?

(i) Positive Statistics!

The successes of the New Deal Policy are set out at the beginning of the Department of Employment and Pensions’ report, ‘Building on New Deal: Local Solutions Meeting Individual Needs.’ Here the Government claims, through its New Deal for Young People (NDYP) to have halved long-term youth unemployment, reduced long term unemployment, including in the over 25’s of the New Deal 25 Plus scheme (ND25 plus), by nearly 75% and for those who are over 50 years of age, New Labour professes an addition of over 110,000 individuals into the workforce (Department of Employment and Pensions, at p 2). While it is clear that statistics do not present the full picture and while they may be enhanced through strategic surveying, it is clear that the New Deal Policy has nevertheless proved to be a success in that it has placed many people, who would otherwise have been on benefits, back into the work force.

(ii) Room for improvement?

Following the first two terms of the New Labour Government, a team at the London School of Economics concluded that while Blair’s administration had lifted large swathes of individuals out of poverty, there was, by 2004, a greater gap between the top and bottom ends of the household income brackets (The Guardian, 2004, Target Areas). There has however been a marked negative response, which professes that the New Labour Welfare reforms are nowhere near as successful as those currently in operation in the USA (Smith, D, Online).

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The Government has acknowledged that the New Deal Policy requires to provide greater assistance to those groups who are referred to as having ‘multiple barriers to work’ (Department for Work and Pensions, 2004, at p 2). These groups include ethnic minorities, lone parents, the disabled, people aged over 50 and those with few qualifications.

2. How and Why does New Deal typify the New Labour Welfare Ideology?

(a) New Labour Welfare Ideology – The ‘Third Way’?

The New Deal Policy of welfare-to-work is clearly set out within New Labour’s 1997 Election Manifesto and is seen as a key part of New Labour’s Third Way policy, which is phrased by the acronym PAP (Pragmatism and Populism). This is arguably a distinct approach to Welfare that loosely professes to place itself within the centre to centre-left of present ideologies political spectrum. However, critics argue that the Third Way is not distinctive but instead bears greater characteristics of the political Right than the Centre or Centre Left (Powell, M, at p 41).

(b) How and Why New Deal is epitomised by New Labour Ideology

(i) Why

The divided opinion over the designation of the ‘Third Way’ into the New Deal policy creates difficulty for the task of illustrating New Deal as a typical example of the Third Way. Therefore, it is better to abandon this concept in order to ascertain the true essence of New Labour Welfare ideology, which is clearly set out in the 1997 Manifesto. The phrase ‘Welfare-to-Work’ appears frequently throughout this document and is a clear and short summation of New Labour’s ideology, which is that the Welfare State, far from facilitating a mere basic financial need to survive, is also a support network of services that are to be actively utilised by job seekers in order to place them back into work.

Therefore, New Deal, far from merely typifying this ideology, is the very mechanism by which it is realised. This is clarified by the statement made by Andrew Smith MP in his summation of the aims of the New Deal Policy. He states that New Labour is:

‘redesigning the contract between the citizen and the welfare state to one that is active and not passive – based on rights as well as responsibilities. We are ending the blight of long term unemployment and the cycle of poverty.’ (Rt Hon Andrew Smith, MP, May 2004, Department for Work and Pensions, at p iii)

Therefore, it seems that the intention of New Labour is that New Deal represents a departure, both from total, long term dependency on the State and virtual abandonment of the impoverished. In other works, it is the tool to progress from ‘Welfare’ to ‘Work’.

(ii) How

New Deal assists people back into work by providing an interventional service throughout the job seeking stage. As explained above, not only are there separate strategies for the various age groups such as New Deal for Young People, New Deal 25 Plus and New Deal for the over 50s. In addition, New Labour is currently focusing on the development of tailor made care for groups with specific needs, and as also explained above, these include the low skilled, ethnic minorities, lone parents and the disabled. This strategy of focusing on particular groups facilitates a greater efficiency in the carrying out of New Labour’s Welfare Policy of Welfare-to-Work.


Analysis of the history of British Welfare Ideology illustrates that New Labour’s key departure is to create a far more interventional approach to welfare that is designed to ensure that unemployment is strictly temporary. While it is far more likely that this departure is economically as opposed to humanitarianly based, New Deal does far more than merely typify the Welfare-to-Work Ideology as it is the vary basis upon which this ideology is realised.



Elizabethan Poor Law 1601

Settlement Act 1662

Gilbert’s Act 1782

Speenhamland System of 1795.

Poor Law Amendment Act 1834

Education Act 1907

National Insurance Act 1911

National Assistance Act 1948

Text Books

Clarke J, Cochrane A and Smart C, 1992, Ideologies of Welfare: from dreams to disillusion, London: Hutchison Education

Hills J and Stewart, K, 2004, A More Equal Society, New Labour, Poverty, Inequality and Exclusion, Policy Press


Powell, M, New Labour and the Third Way in the British Welfare State: A New and Distinct Approach?, Critical Social Policy, Vol. 20, No. 1, 39-60 (2000)

Government and Labour Party Publications

Labour Party Manifesto, 1997

Department for Work and Pensions Report, 2004, Building on New Deal: Local Solutions Meeting Individual Needs, [Available Online] At: www.dwp.gov.uk/publications/dwp/2004/buildingonnewdeal/mainreport.pdf

Web Resource

Smith, David, Welfare Work and Poverty, Publication Commentary, [Available Online] At: http://www.economicsuk.com/original/research/david-wwp.html

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