Tony Blair was Leader of the Labour Party and Leader of the Opposition from his election as Leader on 21 July 1994 until he became Prime Minister on 2 May 1997. Blair became leader upon the death of John Smith. Under Blair, the Labour Party was rebranded as New Labour to distance itself from previous Labour politics and the traditional idea of socialism. Despite opposition from Labour's left-wing, he abolished Clause IV, the party's formal commitment to the nationalisation of the economy, weakened trade union influence in the party, and committed to the free market and the European Union.
 Blair had two Shadow Cabinets during his tenure as opposition leader. On 20 October 1994, following the 1994 Shadow Cabinet elections, Blair announced his first Shadow Cabinet. Blair made a number of significant changes to the Shadow Cabinet on 19 October 1995, following the 1995 Shadow Cabinet elections. Small changes were made to the Shadow Cabinet at the 1996 Shadow Cabinet elections.
 Blair inherited the Labour leadership at a time when the party was ascendant over the Conservatives in the opinion polls, since the Conservative government's reputation in monetary policy was left in tatters by the Black Wednesday economic disaster of September 1992. Blair's election as leader saw Labour support surge higher still in spite of the continuing economic recovery and fall in unemployment that the Conservative government led by John Major had overseen since the end of the 1990–92 recession. 
 At the 1996 Labour Party conference, Blair stated that his three top priorities on coming to office were "education, education, and education". In 1996, the manifesto  New Labour, New Life for Britain was published, which set out the party's new "Third Way" centrist approach to policy, and was presented as the brand of a newly reformed party that had altered Clause IV and endorsed market economics. In May 1995, Labour had achieved considerable success in the local and European elections, and had won four by-elections. For Blair, these achievements were a source of optimism, as they indicated that the Conservatives were in decline. Virtually every opinion poll since late-1992 put Labour ahead of the Conservatives with enough support to form an overall majority.
 
Aided by the unpopularity of John Major's Conservative government (itself deeply divided over the European Union), Blair led the Labour Party to victory in the 1997 general election (its largest landslide general election victory in history), ending eighteen years of Conservative Party rule, with the heaviest Conservative defeat since 1906. Blair became the prime minister of the United Kingdom on 2 May 1997. 

 On 20 October 1994, following the 1994 Shadow Cabinet elections, Blair announced his first Shadow Cabinet.
 Blair made a number of significant changes to the Shadow Cabinet on 19 October 1995, following the 1995 Shadow Cabinet elections. Foster, who had been elected to the post, acceded to Blair's request that he step aside as Chief Whip; he was appointed Shadow Chancellor of the Duchy of Lancaster and Shadow Minister responsible for the Citizen's Charter, taking the latter from Taylor, who remained Shadow Leader of the House. Dewar was appointed Chief Whip under a new rule that made the job appointive and added on additional elective seat in the Shadow Cabinet. Chris Smith replaced Dewar at Social Security, and was replaced as Shadow National Heritage Secretary by Cunningham. Responsibility for the Information Superhighway was transferred from Shadow National Heritage Secretary to a junior Shadow Trade and Industry minister (Geoff Hoon). Cunningham was in turn replaced at the Trade and Industry brief by Beckett. Harman took over the Health portfolio Beckett had held. Blunkett added Harman's Employment portfolio to his own to reflect the created of the Department for Education and Employment.
 Michael Meacher, while remaining in the Shadow Cabinet, became Blunkett's deputy as Shadow Minister for Employment, leaving the Transport brief to Clare Short, newly elected to the Shadow Cabinet. Another newcomer, Tom Clarke, was appointed to the new post of Shadow Minister for Disabled People's Rights.