A revival of trade unions was widely expected when Blair’s New Labour government took over from the Conservatives in Britain in 1997. This did not occur. Collective bargaining continued to retreat. The paper discusses the implications of the changing economic context for the government’s legal innovations, notably statutory trade union recognition and a minimum wage. It describes the consequences for industrial relations. It concludes that New Labour’s legacy may lie in its nurturing of the institutions of social partnership and the use of conciliation.