Tony Blair and Gordon Brown united yesterday on the challenges facing the Labour Government in the clearest sign so far that a smooth transition of power between the two is under way.

The Prime Minister and the Chancellor, who has long wanted to succeed him, produced a joint foreword to a huge Treasury document, analysing the challenges facing Britain in the next decade, which will form the background to next year’s Comprehensive Spending Review.

They agreed that Labour “must renew both our programme in government and our resolve to meet the challenges ahead”.

They identified the four main priorities as meeting the global economic challenge by improving education and skills across the population; meeting the environmental challenge by acting on climate change; meeting the worldwide terrorist threat by delivering security at home and abroad; and responding to rising individual aspirations by advancing investment and reform in the public services and tailoring them to people’s needs. They also pledged to identify the investments and reforms needed in the spending review to equip Britain for the new challenges.

With Mr Blair having virtually anointed Mr Brown as his successor in the Commons two weeks ago, the rare appearance of his name on the kind of document that Mr Brown has traditionally guarded as his own was further evidence of the more relaxed personal relations between the two.

The Treasury has worked with experts across government, the Cabinet, think-tanks, businesses, voluntary organisations and academics to develop a detailed picture of the responses needed. It examines changes to the population that will lead to a 38 per cent increase in those aged 85 and over in the next ten years, intensification of cross-border economic competition and increasing pressures on natural resources and the global climate.

One passage examines the likely impact of the baby-boom generation on demands in the public services. According to studies, baby-boomers are more individualistic than earlier generations and may be more liberal in their attitudes.

Many baby-boomers will also have spent their working life in much better health and higher material comfort than any preceding generation and none will have experienced the Depression and the war years.

They have grown up in a consumer society, the document says. Some may be used to diversity, choice and have international comparisons of customer service. “As a consequence, the baby-boomers are likely to be more demanding consumers even in older age, including of public services, than previous cohorts.”

In another sign that Mr Blair is comfortable with the knowledge that his premiership is coming to an end, he allowed himself to be tempted yesterday to talk about his legacy which, he suggested, would be a “less old-fashioned” Britain. The country had been through cultural change and was more meritocratic than when Labour came to power in 1997, the Prime Minister said.

Asked for his proudest achievements during a Newspaper Society lunch at Westminster, an easygoing Mr Blair identified specific moves such as city academies, NHS reforms and the Northern Ireland peace process.

He said that some of those actions would “reverberate over the years to come, I think, in quite an important way”.

But Mr Blair also indicated that above these “individual items”, he viewed bringing Britain up-to-date as his most far-reaching achievement.

He said: “I think the thing that has changed about the country overall is that I think the country is basically more willing to advance people on merit today, and . . . I think we have become a far more modern country.”Mr Blair added that he regarded David Cameron’s efforts to reform the Conservative Party as reinforcing the extent of the change Labour had overseen. “If you think of the Conservative Party and the changes they’re making today, I happen to regard that as something of an inverted compliment — in the sense that I think they wouldn’t have been doing that unless they also felt they were having to respond to the changes today,” he said.

Challenges

Impact of technological change on public services

Continuing threat of international terrorism

Pressure on natural resources and risk of temperature rise of up to 6C by end of the century

Source: HM Treasury

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