The surprising defeat of Labour by the Tories in the 1992 general election called for the election of a new leader, the mantle of which fell on John Smith. However, his tenure was tragically cut short when he died from a heart attack in May 1994, and was replaced by Tony Blair. Under Blair, Labour underwent a political metamorphosis from a left-wing party to a centre-right one, repudiating in the process past cherished principles and policies, such as Clause Four of the constitution which committed it to the ‘common ownership of the means of production’. Nationalisation was out and the free market, or social market as Blair would have it, was in. The intention was to allow a strongly deregulated market to flourish using the extra wealth it generated to fund improvements in public services – it became known as ‘New Labour’. The question is how far would Reid, given his political record during the 1980s, coalesce with Blair's new vision for Labour's future?

In a revealing encounter with the late Tam Dalyell MP as they both left the funeral of John Smith, the former asked Reid who he was going to vote for in the forthcoming leadership contest. Dalyell said he was giving his vote to John Prescott, while Reid replied saying he was in favour of Margaret Beckett, then acting leader of the Labour Party. Thus, from the outset, there was opposition expressed by Reid to Blair and this only intensified as time wore on and the New Labour agenda was rolled out. As far as Reid was concerned:

Some of the party faithful, particularly in Scotland, who, although unhappy regarding Labour's political direction under Blair, clung on to the hope that Gordon Brown, erstwhile editor of The Red Paper on Scotland (1975), once Prime Minister, would reverse the slide towards the right.