Professor Mr Chairman Ed Balls, former shadow chancellor, now visiting professor at King's College, London, and chairman of Norwich City, came to "The Blair Years" course at King's that I co-teach with Jon Davis (above right) yesterday.

He talked about the Blair-Brown relationship that dominated that government and took questions from our Masters students.

His broad thesis was that Tony Blair and Gordon Brown were close in their politics and got on better than some of the "garbage" reporting suggested. But he said "of course" it would have been "better in the end" if Brown had stood against Blair for the leadership in 1994. "Gordon's view that that it could only happen with great destruction" in the short run, and both Brown and Blair were determined not to put Labour's chances at the 1997 election at risk, because the party had by then lost four elections in a row. He didn't say who would have won if they had stood against each other, but accepted that a lot of later tensions arose from Gordon's withdrawal from the race.

By the time they got to 1993-94, they had been very close for 10 years, with a common agenda. They were both unhappy with the "one more heave" approach John Smith was taking. They both felt that Smith was trying to undermine what they were trying to do [in modernising the party]. And one of the untold stories is that they were close throughout the whole period that Tony Blair was Prime Minister. Gordon had some mistrust of Tony Blair's relationship with Paddy Ashdown and Roy Jenkins. And he was distrustful of Tony Blair's intentions towards Europe. Tony Blair was more Eurosceptic than he was.

The big point is that they were actually quite friendly, and certainly in 1997 to 2001 they were close on policy. There was nothing to say Tony Blair was more New Labour than Gordon.

Balls argued that the absence of serious opposition from the Conservatives – "In the period from 1996 to 2004, I don't remember anything the Tories did having any effect on my life whatsoever" – meant that the natural tendency of people to "gather round poles" meant that the divide in politics was not between Labour and the Tories or even between left and right of the Labour Party, but within New Labour. Thus the ministerial appointments of 1997 were seen as promoting "Gordon's people", and the 1998 reshuffle, in which Peter Mandelson, Stephen Byers and Margaret Jay (our guest last week) were brought into the Cabinet, was seen as an advance for "Tony's people".

He pointed out that Blair's memoir, A Journey, was written after the events it described, and therefore presented the differences between Blair and Brown with retrospective clarity. "It set out how he would have been prime minister after he had been Prime Minister for 10 years. David Cameron and George Osborne made a disastrous mistake in taking the book literally."

He went through some of the policy differences. On foundation hospitals, he said, Blair agreed with Brown "far more" than Alan Milburn, the Health Secretary, thought he did. On tuition fees, he pointed out that Blair allowed David Blunkett, the Education Secretary, to rule out increasing them in the 2001 manifesto. "We were saying to Jeremy Heywood [Blair's Principal Private Secretary] and David Miliband [head of the No 10 Policy Unit], why are we ruling this out?" On anti-social behaviour, "Tony Blair was right and Gordon was wrong." He said: "We were always sceptical about whether ID cards would work." And on the euro the difference was, "'We'd like to join' versus 'We've looked at it.' It was an issue of foreign policy perception and argument," rather than of fundamental disagreement.

The Blair-Brown relationship was, however, "undoubtedly a problem in 2004-05. Tony Blair was strongly inclined to leave. Gordon thought it was his turn to have a go. Tony Blair changed his mind, and this was presented in factional terms." Even then, Balls claimed, 90 per cent of policy was their "common agenda" and most of their mistakes were "common mistakes". Eventually, when Blair finally announced the date of his departure in a speech in his Sedgefield constituency in 2007, Brown advised him on the phone about what to say and how to say it.

He summarised:

From 1997 to 2007 was a strikingly stable period for the economy; Labour enjoyed a huge majority and was quite disciplined; the Conservative Party until David Cameron became leader was not really at the races. There are always forces which pull apart rather than unite. The two of them didn't do enough to make it work and to say to those around them, "We're in it together." You may think this is self-serving: Gordon was more difficult with Tony Blair than vice versa, but the people around Tony Blair were more difficult with the people around Gordon. In the end it suited both of them to let their supporters see their differences rather than their commonality.

In questions, he was asked about Ed Miliband's view that New Labour had been too "starry eyed" about globalisation.

Globalisation was a script, a device for selling the need for reform of economic policy to the party. Labour in 1983 had been an anti-outside-world party. Gordon and Tony didn't think autarky was a good policy. We thought globalisation meant open capital markets and trade. We didn't foresee the globalisation of labour. At the top, for example, we didn't see the international market for footballers, lawyers, professional services. When it came to the expansion of the European Union in 2004, we didn't see the extent to which low-wage people would move. Fundamentally, we didn't think they would.

Asked what was the low point in his relationship with Brown, he said, "Gordon is a good person but also quite complicated." He said he had a good relationship with Brown "all the time he was at the Treasury". It was "harder" when Brown was at No 10.

Another student asked about Brown's opposition to the Fundamental Spending Review, and the suggestion in The New Machiavelli by Jonathan Powell, Blair's Chief of Staff, that Blair wanted to cut public spending in 2005-06, but that Brown resisted, courting popularity for the handover. Balls thought this was "garbage". He said the memoirs are mostly from those around Tony Blair. "In the end there'll have to be some balancing up." But he didn't say if he would be writing his memoirs.