This article argues that citizenship lessons were introduced in schools in England in 2002 principally because of concerns amongst a range of key figures in and beyond New Labour about perceived declining levels of social capital in Britain. The article is structured as follows: first, it places citizenship education in its historical context prior to the election of Labour in 1997, also emphasising the historical dimension to debates inside the Labour Party about political participation and democracy. It then outlines the importance of social capital for the party and explains how the concept was a crucial motivational factor for a variety of actors, constituting an ideational policy network, involved in the development of the citizenship education policy. It concludes that the effectiveness of the initiative is weakened by New Labour's reluctance to challenge the entrenched inequalities that undermine the promotion of social inclusion and thus prevent the development of social capital.