Derek Scott: Economic adviser to Tony Blair who warned against joining the eurozone
Blair praised Scott's acerbic views but wrote that he had 'the diplomatic skills of Dirty Harry'
Derek Scott hankered after life as an elected politician but had to settle for being a political adviser, albeit to two big political beasts, Labour's Denis Healey and Tony Blair. He found the last post frustrating. No 10 figures like Alastair Campbell and Jonathan Powell carried weight because they operated directly to Tony Blair. Scott's influence was limited because of Gordon Brown's dominance of the Labour government's economic agenda and resentment of him as a Blair adviser. Blair's weakness meant that Scott's undoubted economic expertise was never fully exploited.
Scott, born in 1947, was brought up in Bromsgrove, where his father was a jeweller. He graduated in politics and history at Liverpool University and did master's degrees at the LSE and Birkbeck College. He worked in the research unit of a trade union and in the 1970s was a Labour councillor in Chelsea and Kensington. To his surprise, he was invited to join Denis Healey as a special adviser in 1977.
The context of his role as Healey's economic adviser was different from what he experienced 20 years later. The Labour government had no majority in the Commons, was struggling with a seemingly permanent economic crisis and the trade unions were a power in the land. In later years Scott resignedly recalled the long evenings at National Economic Development Council dinners with "the same bloody menu and some union leaders getting pissed".
Healey appreciated his ability to hold his own with Treasury officials without losing their confidence. With Labour in opposition after the 1979 election, Scott continued to provide informal economic advice to Callaghan, while he was leader, until 1981, but fed up with Labour's drift to the left he joined the ranks of disillusioned Labour centre-right figures who helped form the SDP in 1981.
He fought Swindon for the SDP in 1983, achieving a respectable third place, and his intervention probably lost Labour the seat. He tried again in 1987 but had no success. Having rejoined Labour, and now working for Blair, he was tempted to try for the safe Labour seat of Pontefract for the 1997 general election. The Blair connection proved a mixed blessing and the nomination went to Yvette Cooper, a journalist on The Independent.
As the newly elected Labour leader in 1994 Tony Blair needed advice on economic matters, but attempts to recruit Gavyn Davies from his lucrative post at Goldman Sachs proved fruitless. Scott's City contacts and renewed Labour sympathies made him a natural choice to help Blair in a part-time capacity. He helped to draft Blair's speeches, largely wrote Blair's Mais Lecture in 1997, and advised on the reactions of the City and industry. By 1997 he was happy with Labour's economic policy, describing it privately as "almost pure SDP".
His position as Blair's economic adviser in No 10 promised more than it delivered, however, through no fault of his. Blair had effectively delegated economic policy and much social policy to Gordon Brown, and Scott was a casualty of the continuous turf battles between Nos 10 and 11. In the first years Brown was reluctant to consult even his own Treasury officials, let alone No 10. Scott was denied key papers and Brown often insisted on one-to-one meetings with Blair. Difficult negotiations over the government's policy on the single European currency were brokered by Ed Balls, the Chancellor's chief economic adviser, and Jeremy Heywood, Blair's private secretary; Scott was out of the loop.
An irony was that he shared Brown's opposition to euro entry. Blair balanced Scott's opposition to entry with support for entry from Roger Liddle, his foreign affairs adviser and another former SDP man. In his memoir Blair paid tribute to Scott's tough-minded and acerbic views on economic questions but, referring to his rows with the Treasury, added that he had "the diplomatic skills of Dirty Harry".
An increasingly marginalised Scott left No 10 in 2003 for the City, and the following year he published his book Off Whitehall, which created a stir because it was a first-hand account of the rows between Brown and Blair and highlighted the former's "destructive and deceitful behaviour" and character failings. The publicity distracted from the main purpose of the book, the folly of Britain joining the euro – a view close to Brown's. Although both the Blair and Brown camps dismissed the accounts of their relationship as tittle-tattle, subsequent accounts supported Scott.
Scott was a busy figure in City economic life. He had been chief economist at Shell UK, Director of European Economics at BZW and an advisor at PCW. He was still an advisor to Europe Economics and visiting professor at the Cass Business School. Only a few months before his death (stomach cancer was diagnosed in December 2011) he chaired the £250,000 Wolfson Economics Prize Committee on how member states could exit the eurozone relatively smoothly, and carried on with his writing and speaking engagements.
He opposed further moves to EU integration, chaired a cross-party campaign to hold a referendum on the Lisbon Treaty and was a leading figure in the Eurosceptic Open Europe group. By the time of death, aged 65, many of his warnings about the eurozone seemed prescient.
Scott won respect for his firm and clearly expressed views and had many friends across politics, the City and the media. Between 1985 and the mid-1990s he was married to Elinor Goodman, the political editor of Channel 4 News. They were divorced in 2007, by which time he had been in a long-term relationship with Gisela Stuart, the Labour MP for Birmingham Edgbaston. They were married in 2010. Stuart's experience in drawing up a draft EU constitution converted her from a broadly Europhile outlook to the more sceptical one of her husband.
Derek John Scott, politician, economist and political and economic adviser: born 17 January 1947; married 1985 Elinor Goodman (divorced 2007), 2010 Gisela Stuart; died 1 August 2012.
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