This chapter examines the key features of neoliberal thought. It then explores the links between these ideas and the development of social and welfare policies. The main argument advanced here is that the influence of neoliberal ideas has been a key factor in the increasingly punitive context of welfare. These underlying factors need to be understood as part of the analysis of trends in social welfare provision and also the changing relationship between services and service users.

Key features of neoliberal thought

In common with all political and economic ideologies, neoliberalism is a flexible term in that it covers a range of thinkers. There is a danger that such terms are used indiscriminately or as terms of abuse. For example, Labour critics of former Prime Minister Tony Blair label his economic and social policies as ‘neoliberal’. In fact, certainly the first years of his premiership were far from the tenets of neoliberalism, as there was a very significant public investment in education, health and welfare provision (Toynbee and Walker, 2011). As another example the cover of David Harvey's (2005) Marxist analysis of neoliberalism has pictures of General Pinochet, military dictator in Chile, Ronald Reagan, Margaret Thatcher and Deng Xiaoping, testament to the reach and also the flexibility of neoliberal thought.

Stedman-Jones (2012) argues that the political and electoral success of parties committed to or influenced by neoliberal ideas means that there is a danger of seeing their rise as inevitable. In the UK context, this is certainly the narrative of Thatcherism that is presented by writers such as Sandbrook (2013) and Moore (2014). It should also be noted that it was a narrative that Thatcher – ‘there is no alternative’ (see Young, 2013) – was keen to emphasise. This ignores the real possibility that if there had been an election in the autumn of 1978, then James Callaghan and a Labour government would have been returned. The Thatcher government of 1979 marks a clear political shift, the ramifications of which are still being played in modern British politics. The post-war period was dominated by Keynesian economics and the development of a modern welfare state (Kynaston, 2007, 2008), which was an anathema to neoliberals. Keynesian economic policy was broadly followed in the UK by both Conservative and Labour parties.