Tony Blair is back to fight for election victory

TONY Blair will stage a dramatic return to the front line of British politics to campaign for Labour in the general election, close ally Lord Mandelson has revealed.

Tony Blair visiting troops in Iraq: The ex-PM still has to appear at the inquiry into the war. Picture: PA

The Business Secretary said Mr Blair – who has observed a vow of silence on British politics since quitting Downing Street in 2007 – would be one of a number of faces from the early days of New Labour to return in a bid to secure victory for Gordon Brown.

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Although he accepted he would not bet on a Labour win now, Lord Mandelson insisted Tory leader David Cameron could be "in for a shock" at the polls.

Mr Blair is Labour's most successful leader in electoral terms, having won three successive elections, and his presence could give the party a boost.

But his appearance on Friday before the Chilcot inquiry will remind voters of his role in the divisive decision to go to war in Iraq, and Conservatives are likely to claim his participation in the campaign as a sign that Labour is stuck in the past.

His return would also alarm allies of Mr Brown, who spent years trying to oust Mr Blair.

Lord Mandelson said last night: "We want all the party's leadership – past and present – to be contributing to our electoral success.

"They know as well as everyone what is at stake for the country.

"Everyone will get stuck in. Everyone will campaign: Tony Blair, John Prescott, David Blunkett. We need the support of these well-known faces."

Asked whether Labour would win the general election, Lord Mandelson admitted: "I wouldn't put money on it at this stage."

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But he added: "We haven't yet won the general election but nor have we yet lost it.

"If we play our cards correctly, if we continue to make the right judgment calls on the economy, if we demonstrate both our commitment to maintaining front-line services and also show how we are going to pay for those services – and also if we continue to back the opportunities that families want – we are in with a very good chance of being returned."

The Business Secretary compared this year's election – which must take place by 3 June – to that of 1992, when John Major's Tory government scraped to victory after trailing Labour in the polls for months. Many observers put that down to last-minute doubts among voters over whether they really wanted Labour leader Neil Kinnock as prime minister.

Lord Mandelson said voters might be disillusioned with politicians generally and feel it was time for a change, but they had not thought clearly about whether they wanted Mr Cameron in charge.

"I think those like David Cameron who think all they need to do is sit back, say little and wait for power to be passed to them on a plate will be in for a shock," he said. "As we approach a general election, people will be considering again and more deeply where their interests lie, where their values lie and what the future offers are that have been made by the parties."

Neither Lord Mandelson nor his Conservative shadow Kenneth Clarke would rule out new tax rises after the election – a new 50p top rate of income tax is already due to come into effect in April, along with a one-percentage-point hike in National Insurance in 2011.

Asked in a head-to-head debate on Channel 4 whether taxes would have to rise further after the election, both men made clear it was a possibility.

"I hope not, but I am not giving any guarantees they won't," Mr Clarke said. "It will depend on our success in getting public spending down without damaging the essential quality of really vital public services."

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Lord Mandelson said: "If we don't wreck the economy, if we sustain demand and therefore growth in the economy, it may be that we can get away with not putting up taxes further.

"But if we fail on growth and the measures government needs to take to support that growth, it is possible – but not inevitable – that further tax increases will take place."

Both men agreed that it would be necessary to bring down Britain's annual borrowing, which stands at a record 178 billion, to stabilise the economy.

But the Business Secretary warned it would be "disastrous" to follow the Tory policy of reducing it faster than Chancellor Alistair Darling's plan to halve the deficit in four years. "If we are not careful and we start making swingeing cuts in government spending and investment before the recovery is locked in, we will not be trimming back the branches of public spending, we will be cutting the roots of our future economic growth," he said.