Blair endorses Cameron’s economic policy

Says he would have raised VAT and reduced the Budget deficit faster than Brown.

When David Cameron declared, at a 2005 dinner with newspaper executives, that he was "the heir to Blair" he was more right than he could have known.

In his memoir A Journey, Blair offers the coalition's economic policy his unequivocal endorsement and dismisses Gordon Brown as a retrograde Keynesian. He laments that Brown "bought completely the Keynesian 'state is back in fashion' thesis".

Had Blair led Labour into the election, he would have supported a "gradual rise in VAT", he says, a faster pace of deficit reduction and smaller increases in direct taxation.

Here's the key passage:

We should have taken a New Labour way out of the economic crisis: kept direct taxes competitive, had a gradual rise in VAT and other indirect taxes to close the deficit, and used the crisis to push further and faster on reform.

We've long known that while Blair reluctantly supported the new 45p top tax rate, he was opposed to the introduction of the 50p rate -- one of Labour's most popular policies.

On the deficit, he strikes a remarkably Cameron-sounding note:

If governments don't tackle deficits, the bill is footed by taxpayers, who fear that big deficits mean big taxes, both of which reduce confidence, investment and purchasing power.

To my mind, Labour is fortunate that Blair was not in power at the time of the financial crisis. Unlike Brown, he may not have supported the fiscal stimulus that prevented the economy from going into a death spiral.

Writing about the 2010 election, Blair also claims that the public elected "the government they wanted". In fact, most people voted for parties (Labour and the Lib Dems) that opposed immediate cuts in public spending and argued for a slower pace of deficit reduction. What they got was a government committed to economically reckless cuts and to a savage and regressive deficit reduction programme.

But, reading Blair's book, I'm inclined to ask: is there any policy of the coalition's that he disagrees with? The uncomfortable answer for his Labour admirers is: perhaps not.

George Eaton is political editor of the New Statesman.

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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.