9. 1997 to 2001: New Labor

In 1997, Tony Blair’s Labor government stuck with the Conservative’s spending plans. The Chancellor, Gordon Brown, gained a reputation by some as the “prudent Chancellor” and helped to inspire renewed confidence in Labor’s ability to manage the economy. One of the first acts that the new Labor government embarked on was to give the power to set interest rates to the Bank of England, effectively ending the use of interest rates as a political tool. Labor also introduced the minimum wage to the United Kingdom, which has been raised from time to time since its introduction. The Blair government also introduced a number of strategies to cut unemployment. Unemployment fell back to the level of the late 1970s, although it still remained significantly higher than it was during the post-war era and the 1960s.