Lord Mandelson warned that power taken from “globalised capitalism” would be handed to “ill-equipped civil servants and a new generation of trade union barons” – instead of to citizens.
However, Mr Blair’s former close ally also acknowledged Labour could yet win power with its left-wing manifesto – but only if it dumped the unpopular Jeremy Corbyn.
“Were it not for Jeremy Corbyn’s extremely poor personal ratings – they make a majority Labour government an impossibility while he remains – Labour’s prospects would be far stronger than the party’s detractors imagine,” Lord Mandelson wrote.
“There are few if any of Labour’s flagship policies that do not score good opinion poll ratings – until Corbyn is identified as their author.”
Both parties would be competing for “economic worriers who favour security, law and order”.
“Brexit has skewed them towards the Conservatives but, if you remove this factor, they share many Labour instincts and are drawn to many of the ‘populist’ elements of Labour’s ‘re-balancing’ agenda,” Lord Mandelson said.
“These voters back higher spending on healthcare, education, policing and defence, which is why the Conservatives, while condemning Labour’s tax and spend policies, are nonetheless turning on spending taps of their own.”
The verdict comes in a pamphlet entitled McDonnellomics: How Labour’s economic agenda would transform the UK, which argues Labour would deliver the “biggest shift in UK economic policy since the advent of Thatcherism”.
The party is pledging to hike taxes on corporations and the highest earners, introduce a financial services tax to tame the City of London and hand 10 per cent of every company’s shares to its workers.
As well as overturning austerity, Labour would abolish tuition fees, provide free prescriptions and social care and nationalise the railways and utilities.
But Lord Mandelson said: “Instead of moving Britain forward, with new ideas and utilising the opportunities that digital technology and AI, for example, offer us to transform the economy and public services, a Corbyn-McDonnell government wants to reassert the statist mindset that New Labour disavowed.”
And he added: “We have to ask ourselves whether lots of free offers are going to help develop the well-funded modern public services that address today’s needs in health, education and everyday living.”
Register for free to continue reading
Registration is a free and easy way to support our truly independent journalism
By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists
Already have an account? sign in
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies