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Tony Blair's government is one year old today. What challenges lie ahead, what has it achieved so far and, if Labour celebrates ten years in power, how will Britain look in 2007? The experts give their verdicts.

Much as I welcomed the New Deal's attempt to tackle some of poverty's causes and the establishment of the Social Exclusion Unit at the heart of government, their shine was tarnished by the government's initial stance on benefits. There was the refusal to countenance an overall review of benefits adequacy and redistribution through the tax-benefit system; the threat to transfer family credit from low-income mothers to their male partners' pay-packets through a working families tax credit and to cut disability benefits; and, most shameful of all, the abolition of lone parents' benefits.

But the very strength of the backlash against this last policy appears to have produced a shift in the policy compass. The budget was the most redistributive to those on lower incomes and to families with children for years, even if the chancellor refused to use the word "redistribution". It even conceded couples the choice as to how the working families tax credit will be paid. So, there are hopeful indications that the government is starting to listen to some of its traditional supporters.

Welfare in 2007

Blair has declared that if the government "has not raised the living standards of the poorest by the end of its time in office, it will have failed". With so many of its eggs in the policy basket of welfare-to-work, success in reducing poverty and social exclusion will depend on economic forces that are partly outside government's control. And if benefit rates for those who cannot move into work continue to be indexed to prices and not earnings, then the numbers in poverty could rise again.

Although the welfare reform green paper offered us a vision of welfare in 2020, the system's contours remain blurred. We know the work ethic will rule OK and private providers will play a larger role. But will the emphasis on personal responsibility for self-provision lead to a two-tier system on pensions, healthcare etc for those able to afford it and state provision for the rest? If yes, it's goodbye to Blair's "One Nation" dream.

Ruth Lister is professor of social policy, Loughborough University.