Explores the reasons behind the UK government's prioritisation of skills as the main focus of labour market policy. Outlines the rise and fall of industrial relations as a policy issue in the UK from the 1960s to the 2000s, comparing it to the growing importance attached to skills and training. Highlights the centrality of skills policy to New Labour. Considers why skills have come to be seen as a more important form of policy intervention than industrial relations reform. Criticises the neglect of industrial relation issues in labour market policy.