Tony Blair claims he suggested the idea of giving the Bank of England independence to set monetary policy to Gordon Brown.
He says: “In May 1995, we had had the first of a series of discussions in the office, about the Bank of England independence. I was already firmly of the view we should do it.”
As the election loomed, two years later, Blair says: “Gordon had come to the same conclusion, and so when I suggested it, he readily agreed.”
Writing about the day after the election, Blair says he “allowed” Brown to make the announcement and “gave him every paean of praise and status in becoming a major economic figure. I did so firstly because he deserved it, secondly because it was good for the whole thing not to look like a one-man show, and thirdly not doing so would have cause considerable tension.”
Blair says of the move: “I had no doubt it was right. I had been convinced long ago that for politicians to set interest rates was to confuse economics with politics the expedient with the sensible. I had watched the game played out as govern-ments carefully calibrated the interest rate movements with the electoral cycle.”