The good life: Blair after Downing Street

Landing a lucrative job with a Wall Street bank is just the latest in a series of financial coups by the former prime minister. Andy McSmith reports

(Peter Macdiarmid/Getty Images)

One of the more memorable vignettes from Alastair Beaton's television play The Trial of Tony Blair, which imagined the future that lay ahead for the ex-prime minister, is set in an office with a fine view of central London.

The office is vast, but nearly empty. There are telephones, but they are silent. Two members of staff are at their desks by the windows, keen to work, but with nothing to do. The former prime minister is pacing the empty floor, also with nothing to do.

Margaret Thatcher has talked in the past about what a wrench it is to go from doing one of the most stimulating jobs in the world to having time on your hands. She complained that it was as if your life had been smashed to pieces. But her plight was more acute than Tony Blair's, because his was a planned departure rather than a political coup, and it has not taken long for him to make himself busy again.

The former prime minister has been in and out of the Middle East, in his capacity as peace broker for the "Quartet" – the US, EU, UN and Russia. Yesterday he met George Bush at the King David Hotel in Jerusalem. The day before, he had met the leaders of the Palestinian Authority, and before that, Israel's Prime Minister, Ehud Olmert.

Before Christmas, he presided over a donors' conference to try to persuade the world's rich nations to increase aid to the Palestinians, and won promises worth more than £3.7bn. The Palestinians and the radical Arab regimes still mistrust a man they regard as Bush's poodle, but no one can deny that he has put in the hours.

He has also started organising two charitable foundations, done a deal with a publisher, and crossed the globe as the hottest property on the international lecture circuit. As his old friend and former agent John Burton put it: "He hasn't had time to get bored."

He hasn't been getting poor either. To his other commitments, Mr Blair has now added a part-time job as a senior adviser with the Wall Street bank, JPMorgan Chase. Its chairman and chief executive, Jamie Dimon, said: "We operate our business all over the world and Tony Blair will bring our leaders and clients a unique and invaluable global perspective that is especially critical in turbulent times like these."

The bank did not specify how much Mr Blair is to be paid for his "unique" advice, but speculation in the US business press put the figure at around $1m, or £511,000 a year, a graphic illustration of how prime ministers can get seriously rich only after they have left office.

John Major began a lucrative association with the Carlyle Group, a Washington-based fund management company, within a year of his election defeat, first as a member of its European advisory board, and then as its European chairman. That alone is likely to have been worth substantially more than his prime minister's salary. He took up his first UK directorship, with the car components and bus group Mayflower, a year later. He had several other directorships, and, like most other former prime ministers, he signed a seven-figure deal for his memoirs.

Margaret Thatcher also wrote memoirs, which outsold most books on politics, for which she was paid at least £1.5m, and she was paid more than £250,000 a year as a consultant to the Philip Morris tobacco company – with half the money going to her directly, the other half to the Thatcher Foundation. She also made lucrative tours of the US lecture circuit.

Next week, Mr Blair will give three lectures in North America, and over those three days he will earn nearly as much as he did in three years in Downing Street. On Monday, he will address a crowd of 5,000 at the Gibson Amphitheatre, near Los Angeles, as a guest of the American Jewish University. Some guests will have paid £1,200 for the chance to hear and meet him.

The tickets to his next speech, at Indian Wells, California, a luxury resort oasis near Palm Springs, on Tuesday, will be slightly cheaper, about £500 a head. On Thursday he will be in Toronto, addressing 2,000 people at an event sponsored by TD Bank Financial Group.

It is thought that his fees for this short tour could add up to £500,000, which could push his earnings for his first year on the lecture circuit over the £1m mark, including £240,000 he is said to have been paid for a 20-minute speech in China.

He has also negotiated a deal worth £4.6m with Random House for his memoirs – though the bulk of that money will not be paid until he has produced a manuscript, which could take a long time. From the day he left office, he was also entitled to a pension for life, currently valued at £63,468 a year.

Compare these figures with the £187,611-a-year salary, which until July was all that he could contribute to the Blair household income to supplement the earnings of his wife Cherie, and it is clear how leaving office has improved the Blairs' finances.

Six months ago, they must have struggled just to pay the interest on the £3.5m mortgage on their house in Connaught Square, and £500,000 for the two flats Cherie bought in Bristol. Now the couple have been to look at Winslow Hall, a £3m, 22-acre estate near Chequers.

In March, Mr Blair will move all his operations to a new headquarters on the site of the old US embassy in Grosvenor Square, where he has a 10-year lease costing £550,000 a year. He has another office in Jerusalem, in his capacity as Middle East peace envoy, with a staff that includes four British diplomats, plus security and a fleet of silver SUVs and three Mercedes, provided by the United Nations. The UK has contributed £400,000 towards its running costs, but Mr Blair is unpaid for his work.

About a quarter of the former prime minister's time is spent on his two planned charitable foundations. One, which will be based in London, will seek to promote inter-faith understanding between Christians, Jews and Muslims. The other, run from Myrobella, the former Blair home in his old Sedgefield constituency, will aim to attract 365 adults into coaching football, athletics, indoor rowing and tennis in the North-east.

The scale of the Blair operation means that several former Downing Street staff have not needed to look far for new jobs since July. Ruth Turner, who was questioned by police over allegations of cash for honours, is working on the inter-faith think-tank. Four other former aides are working for Mr Blair, and another is doing the organisation work in the Middle East.

There are things Mr Blair has not done, for which he deserves credit. The offer from JPMorgan Chase was not the first approach he has had from big business; he has turned all the other offers down. He has not taken a seat in the House of Lords, which he said was not his style. He has not gone to Washington to accept the Congressional Medal awarded him by his friend George Bush. And, so far, he has not told us how he thinks Gordon Brown is coping. Of all the self sacrifices, that one is probably the hardest.

Balancing the Blair budget

IN

£4.6m publishing deal for memoirs; Up to £1m for speaking engagements; Prime ministerial pension: £63,468; Reportedly c£500,000 for job with JP Morgan Chase

OUT

Payments on £3.5m mortgage for Connaught Square home; Payments on £500,000 mortgage on two flats in Bristol

Where are they now? What members of Blair's inner circle did next

Alastair Campbell, Communications director

Tony Blair's former spin supremo was quoted on a business website as saying: "I was on a plane to South Africa last week and there was a form to fill in that had the category 'occupation', and I didn't really know what to put." Still, he made a packet – reputedly £1m – from his Downing Street diary. He is also a well-paid after-dinner speaker, though his earnings are tiny compared with those of Tony Blair. He writes on sport, for The Times, and works for Leukaemia Research.

Jonathan Powell, Chief of staff

As chief of staff, Powell was the longest-serving, most powerful and best-paid political adviser in Downing Street for the whole of Tony Blair's time there. He has taken up a post this month as managing director of the investment arm of Morgan Stanley, one of the big US banks. His job is to pitch for business in Europe. Powell's new salary is likely to be several times the £136,000 a year he was paid in Downing Street.

Baroness Morgan, Director of government relations

A long-serving member of the Labour Party staff, Sally Morgan handled Tony Blair's relations with the party. She left Downing Street in May 2005, and in November became a non-executive director of the mobile phone company Carphone Warehouse. Since 2006, she has also been a £500-a-day board member of the Olympic Delivery Authority, and is also a non-executive director of Southern Cross Healthcare Group PLC.

David Manning, Foreign policy adviser

As Tony Blair's foreign policy adviser from 2001 to 2003, Manning was involved in the negotiations that preceded the Iraq war, and was a member of Downing Street's unofficial war cabinet. A career diplomat, he moved to the US to be UK ambassador in Washington – which meant his salary went up from £120,000, to £130,000, plus tax-free allowances of £90,000 and the use of an armoured Rolls-Royce. His tour of duty ended in September, and he wasa appointed GCMG in the New Year Honours List.

Lord Levy, Fundraiser and special envoy

A rich self-made businessman before he met Tony Blair, Michael Levy was never paid for his role as a Middle East special envoy, or as a party fundraiser, the role which led to his being arrested twice during the investigation into "cash for honours" allegations. He continues to pursue his far-reaching business interests.

Anji Hunter, 'Gatekeeper'

Having known Tony Blair since they were teenagers, she was the formidable Downing Street "gatekeeper" who controlled access to the Prime Minister. In 2002, she quit to be director of communications for BP, but has now left. She denies Mr Blair wants her to join his St James's Square office. The former PM was at her wedding in 2006 to Sky News's political editor, Adam Boulton.

Margaret McDonagh, Party general secretary

Baroness McDonagh, as she now is, was both the first woman and the youngest general secretary of the Labour Party during her tenure from 1998 to 2001. Having secured for the party a large, secret donation from the proprietor of Express Newspapers, Richard Desmond, she became general manager of the company in 2001. In 2004, she became a non-executive director of TBI, and in March 2007 she became non-executive director of Standard Life. These appointments are better paid than she was during her 16 years working full time for the Labour Party.

Derek Scott, Economic adviser

Mr Scott was Blair's economic adviser for six years, until December 2003, a frustrating experience because of the frosty relations between Blair and Gordon Brown, who refused to listen to Scott's advice. He left to be an economic consultant with KPMG, and is currently managing consultant at Europe Economics and a visiting professor at Cass Business School. He is also a regular contributor to radio, television and newspapers.