Blair pays tribute to 'the most successful Chancellor since war'

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Tony Blair took steps to heal his rift with Gordon Brown yesterday by accepting the Chancellor's criticism that the Labour government had not fulfilled the hopes the nation had when it came to power in 1997.

Tony Blair took steps to heal his rift with Gordon Brown yesterday by accepting the Chancellor's criticism that the Labour government had not fulfilled the hopes the nation had when it came to power in 1997.

In a speech launching Labour's "long campaign" for a 5 May general election, the Prime Minister lavished praise on Mr Brown, who he called "the most successful British post-war Chancellor".

He vowed to fight the election on an "unremittingly New Labour" ticket and put the economy at the heart of the campaign. "Everything we do must be for this one central purpose: increased personal prosperity and well-being for all," he said.

The Prime Minister hopes Labour's strong economic record will help it to break through the "trust barrier" it faces in the electorate because of the Iraq war. The party will also trumpet the help it has given to people on low incomes in the hope of wooing more affluent voters disillusioned with Mr Blair over Iraq.

He said: "We know what works. New Labour works. But we have more to do to fulfil the promise of that early vision - to do what it takes to further improve the lives and living standards of the British people, all of them, not some of them, unshackled by old thinking, vested interests or political correctness, left or right."

This was intended as an olive branch to Mr Brown, who is worried that Labour is in danger of squandering the goodwill it enjoyed when it took power after the 1997 election and of failing to create the "new politics" it promised.

The Chancellor told The Independent last month: "We must open up new alliances. In 1997, people voted for progressive politics as well as progressive policies."

Yesterday, Mr Blair insisted that the economy was always going to be "centre stage" in Labour's campaign, dismissing claims from the Brown camp that the Prime Minister wanted to focus on a new raft of public sector reforms. One Blair aide said: "That was a deliberate canard - we were always going to do both."

Earlier this week, Mr Blair was furious with Mr Brown over a new book which claimed the Chancellor told him he would never trust him again after he changed his mind about standing down last year. But yesterday he tried to cement the fragile truce he has struck with Mr Brown.

Speaking in Chatham, Kent, Mr Blair insisted that Labour is "more ideologically united than at any time in its 100 year history". While hailing the Government's successes, he admitted that life was "tough" for many people and said Labour needed to "earn" a third election victory.

He said: "We are still a long way from completing our journey. Too many families still find it too hard. Too many people still don't work who could work. Too many children still fail basic literacy and numeracy ... Many young people find it hard to get a foot on the housing ladder. A six-month maximum wait for NHS treatment is better than 18 months but it is nowhere near good enough."

The Prime Minister made it clear that he had a lot of unfinished business to complete to cement his legacy before he stands down - promising "an ambitious programme" for a third term that would make public services more consumer-orientated by extending choice and diversity. This could yet prove a source of friction with Mr Brown when the Labour manifesto is drawn up.

He said: " We don't pay taxes for public services simply to invest in a good cause. To justify the tax paid by each individual, services must deliver for the individual, offering value for money which is as good - if not better - than that which the individual could provide for themselves if they were able.

"It is this understanding which has driven New Labour's radical reform of public services - reform to put the individual citizen: the patient, the parent, the pupil, the law-abiding citizen, at the centre of each public service with a service reformed to meet their individual requirements."

The Prime Minister promised "even stronger reform in the NHS and schools", to extend the frontiers of the welfare state: especially childcare and provision for the under-fives, changes to incapacity benefit and pensions, help for first-time home buyers - particularly in lower income groups and more generally across the South-east, tackling anti-social behaviour and dealing with the problems of immigration and asylum without making the "mistake of confusing public concern with prejudice."

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