Recovery Has Choked Says Darling
Alistair Darling paints a bleak picture of our economic past and present at the Cheltenham Festival
Libby Purves had already interviewed one of the major figures of the credit crunch a couple of hours earlier in the form of Robert Peston; now came the man who was in charge of the economy when it happened.
Alistair Darling’s appearance at the Times Cheltenham Literature Festival was candid and very human. At times it was easy to forget he was a politician – he even enjoys The Thick of It, though he said Yes, Minister was more accurate – if it hadn’t been for his making a particular emphatic hand gesture beloved of Tony Blair (the hand moving away from the body, palm towards him, thumb up). A serious, modest Scot, this is a man who was twice voted most boring politician of the year and whose mother’s advice was: “Never get ahead of yourself.”
Of his decision to publish a book – Back from the Brink – so soon after the events of the Credit Crunch (and subsequent recession), Darling said “It was 1,000 very interesting days,” and added that given all of the less than reliable coverage, he wanted to put forward “a fair and accurate account” immediately. As proof of how unreliable the reporting had been, he explained that the so-called ‘Balti Bail-Out’ – the night when the decision was made to save RBS over a takeaway curry – attributed him with eating the wrong kind of curry.
Darling was abroad when the run on Northern Rock began, but said that at the least it prepared him for action when RBS began to topple. “At that time, we were not concerned about the solvency of RBS,” said Darling – this despite the fact that RBS held 50 times less capital than the amount they were spending (the figure was 100 times less for Northern Rock). “We were all guilty” of going along with the system, he said.
On that fateful curry night, Darling was shocked by the “arguing and bickering” of RBS with the government, though the company only had three hours until they ran out of money. He compared the experience as being “like the captain of the Titanic consulting with the ship’s architect” and finding there were “not enough lifeboats”.
These traumas weren’t the only troubles of his time as Chancellor, of course. Darling was in Edinburgh eating a bacon roll when he heard about HMRC losing the personal data of 25 million people (mainly Child Benefit recipients). Getting the truth of them was “like pulling teeth”, he said.
Meanwhile, there were the machinations of those at the top of the political and economic trees. The Bank of England was a frustration for Darling as Chancellor, because it “came dangerously close to allying itself to opposition policy”.
Worse, Darling’s own party tried to shoot him down over an interview he gave to the Times and repeated in the Guardian in which he said we were facing the worst recession since the 1930s. (Fittingly, Darling was on his way to a Leonard Cohen gig when he spoke to the Times.) I can deal with most problems,” said Darling, “but it was just so irritating it was people allegedly on my own side.” Meanwhile, Gordon Brown made Darling’s life difficult. He was given almost no time to create his first budget as Chancellor and keeping kept out of the loop as regarding spending plans. The result, he said honestly, was “a disaster”. Nevertheless, Darling offered some defence for Brown when compared to today’s situation: “For all the criticisms I have, he has many strengths,” said Darling.
Darling sounded worldy wise, if not completely jaded. He did not advocate revenge legislation against the bankers, for example. “How much pain do you have to inflict to make people better?” he asked, adding that: “You cannot criminalise bad judgement.” At the same time, he stated clearly that the rate of bankers’ bonuses is “not a healthy situation and will lead to more risks”.
Most of all, Darling despaired of the coalition government’s tactics to cut the deficit. The recovery he began had been choked, he said. “There seems to be absolutely no leadership.”
Back from the Brink by Alistair Darling is out now from Atlantic. Picture by Murdo Macleod.