The next chapter in Blair’s pursuit of wealth

New reports reveal that he has registered a “Mayfair bank” with the FSA.

It's not great timing for the man who was once credited with being a master of spin. After a week of speculation around Tony Blair's decision to donate the proceeds of his memoir, A Journey, to the Royal British Legion comes news that the former premier has set up a Mayfair investment advisory firm.

The company, Firerush, was apparently set up to manage the finances of his consultancy firm, Tony Blair Associates (TBA), but, as the Bloomberg report points out, Blair has hired former investment bankers -- including an ex-Lehman Brothers employee -- and has registered the firm with the Financial Services Authority (FSA). A spokesperson has denied, however, that the outfit will operate as an investment bank.

Whether it's a bank or not, it's a sign of the continuing expansion of the Blair empire (he is now said to be worth about £20m -- oddly, the Labour Party is apparently in debt by the same amount, according to John Prescott). How far the former Sedgefield MP has travelled from such petty, parochial issues. He is now able to swan between seven homes, various high-paid positions and lucrative public speaking fees.

Blair still has a few defenders, but surely their cause can't be helped by this latest twist in the tale of endless wealth accumulation. But why is it so ugly to behold? It is cynical (though understandable) to question the motivation for his charitable donation -- a consequence of his wealth. And there are no rules to say a former premier cannot go on to financial success after leaving office.

But, in Blair's case, there's that sense -- just as there was when he was in office -- of a gulf between the external presentation and the inner reality. He gives a highly publicised donation and, on the quiet, registers an investment vehicle in Mayfair. He makes occasional but well-documented appearances in the Middle East and, again, almost silently, receives cash from a South Korean oil firm.

It's the sense of duplicity that stinks.

Sophie Elmhirst is features editor of the New Statesman

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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.