However, just two years after the election night party at the Royal Festival Hall, doubts were beginning to creep in. For Butler, at least, the optimism was already beginning to seem misplaced, and the shine had begun to wear off the new PM, now surrounded by the likes of Peter Mandelson and Alastair Campbell.
"Maybe we were all guilty of too much optimism," he says. "It wasn't long before the new ministers looked and sounded
like the old ones.
"We were promised Cool Britannia and a People's Government. Instead we got boom and bust, injustice, surveillance, regulation, stealth taxes, sleaze, lies and binge-drinking ladettes."
Today, with the country struggling to cope with the worst recession for 70 years, those early pledges to end the cycle of boom and bust seem more than a little hollow. Britain is not alone, but according to Butler, whose book The Rotten State of Britain has never looked more timely, blaming a global downturn is an abdication of responsibility.
"Government borrowing is higher than at any point since the Second World War," he says. "The current crisis may well have originated in America, but in reality, Britain's position was already weak. There was nothing saved to tide us through the bad times and our only hope is to borrow more.
"Gordon Brown's talk of prudent fiscal policy was a sham. As Chancellor, he allowed borrowing to soar and somehow it always turned out to be higher than his Budget predictions. It's too simple to blame our plight on what is happening on the other side of the Atlantic or on other forces beyond our control.
"The true rate of inflation is not easy to measure. However, the decision to scrap the Retail Price Index, which included property prices, in favour of the Consumer Price Index, which didn't, was absolute madness. House prices soared, but the Bank of England was focused on other things and it meant borrowing spiralled out of control.
"Brown's other big mistake was to pass the responsibility of regulating the banking sector from the Bank of England to the Financial Services Authority. The Bank of England had a much better grasp of what was actually happening in the financial markets and could quietly tell overstretched banks to mend
"In October 2006, long before Northern Rock went bust, the Bank told the FSA it suspected problems. For whatever reason the situation was allowed to continue.
"Nature took its course and a devastating domino effect began. With the Government feeling forced to bail out Northern Rock, it put itself in the position where it would have to do the same for other troubled institutions."
As businesses, small and large, feel the effects of the banking crisis, redundancies have become inevitable. Some predict in the coming months unemployment will top the three million mark. If proved right, it will be a grim landmark, but according to Butler the jobs timebomb started ticking a long time ago.
"The truth is there has been no discernible change in Britain's productivity," he says. "In fact, economic growth was slightly lower in the Blair years than during John Major's time as PM. While there has been an explosion of public sector jobs, it's the private sector which creates the wealth."
It's not just economic policy which has contributed to the current crisis. According to Butler, New Labour's reliance on spin doctors, its promotion of the "nanny state" and its inability to tackle crime and antisocial behaviour have eroded the country's once solid foundations.
"Our police and justice system is the most expensive in the world, but what do we get for it? " he says.
"The Government claims that crime is falling, but it depends what figures you believe. Four years ago an international crime survey saw Britain top the EU charts for car theft, assaults and burglaries.
"Meanwhile the British Crime Survey finds people's real experience of crime is that street robberies, violence, gun crime and knife incidents have soared.
"In response, the Home Office says the number of offences brought to justice has risen. Maybe. But nearly half are minor incidents dealt with by on-the-spot fines. We are not catching gangs who wield guns and knives, we are catching street traders who sell apples by the pound and their customers who drop the core in the gutter."
It's depressing stuff, but after spending more than a decade wading through all that's wrong with Britain in the 21st century, Butler has not ruled out the possibility of recovery. If he has managed to retain even the merest glimmer of optimism there may yet be hope for the rest of us.
"Hope springs eternal," he says. "Our broken democracy may be looking more autocratic than it has ever been, but a few simple changes would help re-establish the divide between what is party and what is state. Party appointees in Downing Street should not have power over civil servants. The appointment of judges, diplomats and quango members should be a job for Parliament, not for the Prime Minister behind the closed doors of Downing Street. And it should be Parliament that decides whether Britain goes to war.
"Power needs to be taken from the top and devolved to local decision-making. What's rotten in Britain is certainly not its people. They are as proud, inventive, fair-minded, tolerant and enterprising as they have ever been. While those virtues have been stifled by central Government, it is possible to unravel this mess, but it's going to be painful."
ROTTEN BRITAIN: THE NUMBERS
In real terms, taxes have risen by 52 per cent since 1997.
In the last 12 years, the cost of Whitehall spin doctors has trebled to £5.9m.
Only 28 per cent of British workers are qualified up to apprentice or equivalent level, compared to more than half in France and 65 per cent in Germany.
Today, more than three million people pay the highest rate of income tax – 50 per cent more than in 1997.
Between 2006 and 2007, the number of frontline police constables fell by 1,460.
Each year the Government approves around 3,500 new regulations, amounting to 75,000 pages of rules, with another 25,000 pages of explanation.
Published in The Yorkshire Post here