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This highly topical study reflects on the current problems faced by social democratic parties in government when espousing policies of severe pragmatism and fiscal prudence, and provides an historical medium-term perspective to both parties' substantial changes in labour market policies. There is now a good deal of interest in the Third Way and the Neue Mitte, and this book provides much needed empirical detail, and solid analysis of the substance of these ideas. It will be of great interest to students and researchers in comparative politics, social democracy and economic policy.