Britain's New Labour government has put welfare reform at the top of its political agenda. It has followed a radical "workfare" agenda in relation to labour and social market policies and no longer aims to secure full employment mainly through direct job creation or Keynesian demand management. Instead, it promotes equal opportunity for all based on a contract between benefits claimants and the employment service. The New Deal is at the heart of British activation programmes for the unemployed. American policy paradigms have influenced the design of the New Deal. Policy transfer in activation policies from the USA to Britain is due to institutional similarities in British and American welfare states on the one hand, and to the comparable structure of their labour markets on the other hand. The influence of the European social model on British labour market policies thus remains limited.

Britain’s New Labour Government has placed welfare reform at the top of its political agenda. New Labour has endorsed a radical ‘workfare’ agenda in relation to labour market policies. The government no longer aims to secure full employment through direct job creation or Keynesian demand management. Instead, it promotes the notion of equal opportunities for all based on a contract between benefit claimants and the employment service. The New Deal is at the heart of British activation programmes for the unemployed. While American policies have provided a crucial influence on the design of the New Deal, the influence of European programmes has been – and still is – much more limited. The article provides ample evidence of the lack of European–British policy networks and explores the reasons why policy transfer occurs principally from the US rather than from Continental Europe.

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This article examines the evolution of the programme Temporary Assistance for Needy Families (TANF) since 1996 . In 1996 , the transformation of Aid to Families with Dependent Children (AFDC) marked a watershed in American social policy. AFDC was the main US public assistance programme for single parents. By the mid-1990 s, it was also the most unpopular social programme in the United States, which explained why Bill Clinton promised to 'end welfare as we know it' during his presidential campaign in 1996 . TANF ended automatic individual entitlement to public assistance, established a five-year time limit for receiving cash assistance, and promoted a punitive approach towards welfare recipients, who were in theory increasingly required to work in exchange for benefits. This approach is known as the Work First Approach. Cash assistance was temporary, and granted as a favour to low-income mothers, who were required to comply with various behavioural requirements. TANF was hailed as a tremendous success on both sides of the political spectrum. This bipartisan consensus explains why the new Republican administration (G. W. Bush became President in January 2001 ) wanted to build upon the existing programme.