Lord Howe yesterday distanced himself from suggestions in Cabinet Office papers that in 1981 he advised the Prime Minister, Margaret Thatcher, to abandon Liverpool to "managed decline".
The former Chancellor said the documents – released under the 30-year rule – did not reflect accurately his conversations about the potential regeneration of Liverpool soon after the destructive riots in the Toxteth area of the city. In one letter from 1981, he wrote: "I cannot help feeling that the option of managed decline is one which we should not forget altogether."
But speaking on Radio 4 yesterday, the peer said: "I don't recall how that argument got into the discussion at all. It certainly doesn't sound very considerate. But certainly I think the Chancellor is so often arguing against spending money as being the only answer.
"As I say, Michael Heseltine and I together introduced enterprise zones in Merseyside, as well as in many other places, which was a better way, if you like, of making help available as quickly as possible.
"Certainly, as a former Merseyside MP, I am surprised to find myself ever having argued quite as I am quoted to have done on Liverpool."
Lord Heseltine – who, after the riots was despatched to Liverpool to establish how to regenerate it – also disputed the notion that the city would have been abandoned. He said: "It never really got any traction for the simplest reason that the cabinet minister responsible for so much of the policy that affected the city was me.
"I simply wouldn't countenance that you could say that one of England's great cities – a world city – was going into managed decline here. That would simply be unthinkable to the approach that I believed to be necessary to a very important part of our history."