Governments in all advanced industrial societies are involved in an endless struggle of how to 'square the welfare circle', as demand for public services rises due to demographic, social and labour market foctors. Government ability to finance this rising tide of public service demand is constrained by economic and, at times, ideological factors but failure to make welfare provision has adverse electoral consequeces. This is not an issue which is likely to go away. examines the issues and factors affecting the welfare state and by comparing the proposals of the three main UK political parties for the welfare system for the remaining part of the decade, offers a prospective analysis of the future of welfare.