Introduction

The UK is a typical example of both a liberal market economy (Hall and Soskice, 2001) and liberal welfare state regime (Esping-Andersen, 1990). From the outset, it is important to stress that the UK does not fit a framework that distinguishes between an ‘industrial logic’ and a ‘post-industrial logic’ when it comes to labour market policies and public unemployment benefits as the industrial logic was never relevant here to begin with and the crisis did not change this. It is also important to bear in mind that – even before the vote to leave the European Union (EU) – the EU's influence on social policy in the UK was relatively limited and that ‘soft’ unbinding policy recommendations had little impact.

This is not to say, however, that no change in labour market policies has taken place since the crisis. The following analysis will first examine the impact of the crisis on Britain and then map the changes and continuities in the areas of unemployment benefits, employment protection legislation, active labour market policies (ALMPs), training and human capital formation, and needs-based social protection for the unemployed. The year 2010 represents a key turning point in two respects: it was the year in which the full onset of the crisis was felt in Britain, and also the year when the government changed to a Conservative-dominated coalition with the Liberal Democrats (in 2015, replaced by a Conservative majority government), resulting in a number of significant welfare and labour market reforms.

We argue that since the crisis, the pattern of labour market and unemployment policies has changed towards even more flexibility and less income protection despite growing problems of precariousness. Many of the existing programmes that aimed at human capital formation have either been redefined as a work test or turned into an opportunity for employers to undercut existing employment protection legislation and the minimum wage. With the exception of a brief ‘Keynesian’ moment in which the focus was on fiscal stimulus and one temporary direct labour market programme was introduced, the emphasis has been on ‘deficit reduction’. Rather than seeing the crisis as a turning point, a policy path taken since the 1980s was continued.